"Economists usually describe goods as being either (gross) complements or (gross) substitutes. Yet, what is less known is that one good may be a gross substitute for a second good, while the second good is a gross complement to the first good. This article develops a theory of asymmetric gross...

Benchmark two-good utility functions involving a good with zero income elasticity and unit income elasticity are familiar. In this paper we derive utility functions for the additional benchmark cases where one good has zero cross-price elasticity, unit own-price elasticity and zero own-price...

Horn's rule says that messages can be kept ambiguous if only a single interpretation is plausible. Speakers only perform costly disambiguation to convey surprising information. This paper shows that, while non-cooperative game theory cannot justify Horn's rule, evolutionary game theory can. In...

We show that the intuition underlying the supplier-induced demand (SID) hypothesis is reflected in the cheap-talk literature from game theory, and in the credence-good literature from the economics of information. Applying these theories, we conclude that a neoclassical version of the SID...

This paper distinguishes between two scenarios for the physician-patient encounter. In the cure scenario, the patient does not know whether a loss can be recovered. In the prevention scenario, the patient faces a threat but does not know whether this threat is real enough to justify preventive...

The literature on the electronic mail game shows that players' mutual expectations may lock them into requiring an inefficiently large number of confirmations and confirmations of confirmations from one another. This paper shows that this result hinges on the assumption that, with the exception...