: The paper provides a model where authority relationships are founded on reputation. The viability of authority is the result of subordinates' free-riding on each other challenges, reducing the frequency of challenges, and making reputations worth defending. The party with authority secures...

We study how individuals cope with the complexity of their environment by developing subjective models, or representations, to guide their predictions and decisions. Formally, an individual who believes his environment is deterministic, but too complex to permit tractable deterministic...

This note questions the behavioral content of second-order acts and their use in decision theoretic models. We show that there can be no verification mechanism to determine what the decision maker receives under a second-order act. This impossibility applies even in idealized repeated...

This note questions the behavioral content of second-order acts and their use in decision theoretic models. We show that there can be no verification mechanism to determine what the decision maker receives under a second-order act. This impossibility applies even in idealized repeated...

A preference is invariant with respect to a transformation tau if its ranking of acts is unaffected by a reshuffling of the states under tau. We show that any invariant preference must be parametric: there is a unique sufficient set of parameters such that the preference ranks acts according to...

Authority relationships are viewed as reciprocal exchange in which a principal offers rents in return for subordinates' compliance with his authority. These rents induce compliance by creating a collective action problem among subordinates so they free-ride on each other in challenging the...

A player inuences a collective outcome if his actions can change the probability of that outcome. He is Æ-pivotal if this change exceeds some threshold Æ. We study inuence in general environments with N players and arbitrary sets of signals. It is shown that inuence is maximized when players'...

The paper studies a contracting problem in which a Principal enters in two-sided moral hazards with N independent agents. There are no technological or informational linkages between the N agency problems: The Principal's costs are additive across agents; there is no common uncertainty in the...

The paper develops a new modeling framework to study factor structures and Arbitrage Pricing Theory in large asset markets. The asset economy in this framework consists of a continuum of assets. Finite subsets of assets are interpreted as random draws from the underlying economy. I show that the...