This paper provides an explanation for why the sunk cost bias persists among firms in a competitive environment in which rich learning possibilities are allowed. We envision firms that experiment with cost methodologies that are consistent with real-world accounting practices, including ones...

This paper develops a framework in which a model with a continuum of agents and with individual and aggregate risks can be viewed as an idealization of large finite economies. The paper identifies conditions under which a sequence of finite economies gives rise to a limiting continuum economy in...

In developing countries with weak institutions, there is implicitly a large reliance on elections to instill norms of accountability and reduce corruption. In this paper we show that electoral discipline may be ineffective in reducing corruption when political competition is too high or too low....

We study two-player discounted repeated games in which one player cannot monitor the other unless he pays a fixed amount. It is well known that in such a model the folk theorem holds when the monitoring cost is on the order of magnitude of the stage payoff. We analyze high frequency games in...

We study how the launching of a do-not-spam registry will affect the internet's efficiency. We show that as long as the cost of sending spam messages is not high, having rich users (who have high-quality filters) join the registry has the desirable effect of lowering the number of spam messages...

We consider an example of a Markov game with lack of information on one side, that was .rst introduced by Renault (2002). We compute both the value and optimal strategies for a range of parameter values.

We provide a model to study the effect of improving the quality of the filters that users use, and the increase of the cost of mailing spam messages, on the total number of messages that spammers send. We show that increasing the cost of mailing spam messages have the unequivocal effect of...

We study the existence of correlated equilibrium payoff in stochastic games. The correlation devices that we use are either autonomous (they base their choice of signal on previous signals, but not on previous states or actions) or stationary (their choice is independent of any data, and is...