A necessary and sufficient condition for the existence of a common prior for several players is given in terms of the players' present beliefs only. A common prior exists, if for each random variable it is common knowledge that all its iterated expectations converge to the same value; this value...

We analyse belief formation in social networks in a laboratory experiment. Our 3 x 3 design varies the network structure and the amount of information agents have about it. Agents observe an imperfect private signal on the true state of the world and then repeatedly guess the true state,...

Negotiations between buyers and suppliers that require sharing cost details to identify profitable relationship specific investments often fail and result in hold-ups. Based on inequity aversion, strategic uncertainty, and risk dominance criteria, we expect negotiators to be more reluctant to...

This paper provides a more general model of the determination of rent-seeking costs by combining the following features: endogenous rent determination, asymmetric effectiveness of contending agents in their lobbying efforts, and multiple periods. In doing so, the paper generalizes some aspects...

We analyze the effects of introducing asymmetric information in an investment game (Berg et al., 1995), in which the division of an economic surplus between a trustor and a trustee is not contractible. Backward induction suggests that rational self-interested players would not voluntarily engage...

Early results on the emptiness of the core and the majority-rule-chaos results led to the recognition of the importance of modeling institutional details in political processes. A sample of the literature on game-theoretic models of political phenomena that ensued is presented. In the case of...

As the green bond market continues to develop and assume a critical role as a post-pandemic vehicle for supporting a balanced economic rebuild and credible transition efforts, policymakers must reassess the current disclosure regime. This paper derives findings from Bayesian games to demonstrate...

We model competition on a credence market governed by an imperfect label, signaling high quality, as a rank-order tournament between firms. In this market interaction, asymmetric firms jointly and competitively control the underlying quality ranking's precision by releasing individual...

Costless pre-play communication has been shown to effectively facilitate within-group coordination. However, in competitive coordination games, such as rent-seeking contests, better within-group coordination leads to more aggressive competition and lower efficiency. We report an experiment in...

The rational expectations equilibrium (REE), as introduced in Radner (1979) in a general equilibrium setting à la Arrow–Debreu–McKenzie, often fails to have desirable properties such as universal existence, incentive compatibility and efficiency. We resolve those problems by providing a new...