This paper analyzes the use of a version of lexical maximim strategies, called protective behavior, in two-sided matching models. It restricts attention to mechanisms which produce stable matchings, that is, matchings which are individually rational and pairwise optimal. The main results of the...

In an intertemporal Arrow-Debreu economy with a continuum of agents, suppose that the auctioneer sets prices while the government institutes optimal lump-sum transfers period by period. An earlier paper showed how subgame imperfections arise because agents understand how their current decisions...