People with a self-control problem often seek relief through social interactions rather than binding commitments. Thus, in self-help groups like Alcoholics Anonymous, Narcotics Anonymous etc, members are said to achieve better personal outcomes by mainly sharing their experiences. In other...

In this paper we study how observing the actions of others affects individuals' ability to exercise self-control.

Analysts make competing claims about when and how politicians can use fear to gain support for suboptimal policies. Using a model, we clarify how common attributes of fear affect politicians’ abilities to achieve self-serving outcomes that are bad for voters. In it, a politician provides...

A simple model of marriage and divorce predicts that no marriages occur. Yet, in real life, people marry all the time in seemingly similar situations. This discordance is explained using psychological game theory. An emotional guilt effect is explicitly modeled and multiple belief-dependent...

Oligopolistic retailers decide on the initial inventories of an undifferentiated limited-lifetime product offered to strategic consumers. A manufacturer sets the first-period (full) price, while the second-period (clearance) price is determined by a market clearing process. The resulting...

We propose a solution concept for games that are played among hyperbolic discounters that are possibly naive about their own, or about their opponent's future time inconsistency. Our perception-perfect equilibrium essentially requires each player to take an action consistent with the subgame...

We develop a model with intra-generational consumption externalities, based on the overlapping generation version of Diamond (1965) model. More specifically, we consider a two-period lived overlapping generation economy, assuming that the utility of each consumer depends also on the average...

This paper investigates how the introduction of social preferences affects players` equilibrium behavior in both one-shot and infinitely repeated versions of the Prisoner`s Dilemma game. We first show that defection survives as the unique equilibrium of the stage game if at least one player is...