We study how the framework of classical game theory changes when the preferences of the players are described by Prospect Theory instead of Expected Utility Theory. Specifically, we study the influence of framing effect and probability weighting on the existence and specific structure of Nash...

I exploit a major structural change that has occurred in world soccer to study the impact ofincentives on outcomes in a strategic setting. A game-theoretic model is developed thatcaptures some essential strategic elements of soccer vis-à-vis the number of points awardedto a win. The observable...

The famous game of two cars is a pursuit-evasion dynamic game. In theextended version presented here, a correct driver (evader) on a freeway detectsa wrong-way driver (pursuer in a worst case scenario), i.e., a car driving on thewrong lanes of the road or in the wrong direction. The correct...

Reputation bildet eine wichtige Vorraussetzung für das Funktionierende des alltäglichen Wirtschaftslebens.

When risks are interdependent, an agent's decision to self-protect affects the loss probabilities faced by others. Due to these externalities, economic agents invest too little in prevention relative to the socially efficient level by ignoring marginal external costs or benefits conferred on...

This note demonstrates that it is easily possible to compute technological parameters out of national income accounting data in the presence of bargaining in the labor market. Applying the method to US data, we obtain that the output elasticity with respect to capital exceed 0.5.

In this paper, we reexamine Eliaz's results (2002) of fault tolerantimplementation on one hand and we extend theorems 1 and 2 of Doghmi and Ziad (2008a) to bounded rationality environments, on the other. We identify weak versions of thek-no veto power condition, in conjunction with unanimity and...

This paper considers a matchmaker game in the Shapley-Shubik(1971) (one-to-one) assignment problem. Each …rm proposes how muchit is willing to pay each worker if they are matched. Each worker alsoproposes which salary she is willing to accept from each …rm if they arematched. The matchmaker...

We analyse the effect of skill mismatch in a search model of equilibrium unemployment with risk-neutral agents, endogenous job destruction, and two-sidedex-ante heterogeneity. First, we examine the interaction of labour market institutions and skill mismatch. We find that skill mismatch changes...

Relying on the specific example of ultimatum bargaining experiments this paperexplores the possible role of empirical knowledge of behavioural “norm(ative)facts” within the search for (W)RE – (Wide) Reflective Equilibria on normativeissues. Assuming that “pro-social” behaviour...