We consider a decision maker who faces dynamic decision situations that involve intertemporal trade‐offs, as in consumption–savings problems, and who experiences taste shocks that are transient contingent on the state of the world. We axiomatize a recursive representation of choice over...

We consider a decision maker who experiences transient preference shocks when faced with dynamic decision situations that involve intertemporal tradeoffs, such as those in consumption savings problems. We axiomatize a recursive representation of choice over infinite horizon consumption problems...

Following Kreps (1979), we consider a decision maker who is uncertain about her future taste for immediate consumption. This uncertainty leaves the decision maker with a preference for flexibility: When choosing among menus containing alternatives for future choice, she weakly prefers menus with...

Aumann and Hart (Econometrica, Nov. 2003) have shown that in games of one-sided incomplete information, the set of equilibrium outcomes achievable can be expanded considerably if the players are allowed to communicate without exogenous time limits and completely characterise the equilibria from...

We study the effect of communication in two-person games of incomplete information. We show that any rational mediated communication mechanism satisfying a Nash domination condition can be implemented as the perfect Bayesian equilibrium of a communication extension of the original game and ends...

We consider the following two-period problem of self-control. In the first period, an individual has to decide on the set of feasible choices from which she will select one in the second period. In the second period, the individual might choose an alternative that she would find inferior in the...

The main justification for cash-in-advance (CIA) equilibria when there are multiple assets is a Shapley-Shubik trading-post model where the agents coordinate on a particular medium of exchange. Of course, there are other equilibria. We introduce a refinement and show that the CIA equilibrium...