Showing 1 - 10 of 13
A popular theory of business cycles is that they are driven by animal spirits: shifts in expectations brought on by sunspots. Two prominent examples are Diamond (JPE, 1982) and Howitt and McAfee (AER, 1992). We show that these models have unique equilibria if there are payoff shocks of any size....
Persistent link: https://www.econbiz.de/10005783637
I introduce a solution concept for infinite-horizon games, called ``Experimental Equilibrium``, in which players systematically test threats that affect their optimal response. Both the tests and the optimal response are part of equilibrium behavior.
Persistent link: https://www.econbiz.de/10005783643
We study equilibrium in games in which each player uses the procedure in which he associates a consequence with each of his actions and chooses the action that has the best consequence. The association may be stochastic but is not arbitrary : it reglects the other players' equilibrium behavior....
Persistent link: https://www.econbiz.de/10005675372
This paper examines the effects of strategic delegation in a simple ultimatum game experiment. Our main concern is to examine the effect of delegation on the way players think about the game and how the play it.
Persistent link: https://www.econbiz.de/10005675373
A decision maker faces a decision problem, or a game against nature. For each probability distribution over the state of the world (nature`s strategies), she has a weak order over her acts (pure strategies). We formulate conditions on these weak orders guaranteeing that they can be jointly...
Persistent link: https://www.econbiz.de/10005675378
The systematic optimism of lawyers is even more of a puzzle. A lawyer suffering from a persistent problem of inaccurate assessments will surely be driven out of the market. The present analysis challenges these conventional allegations. Using evolutionary game theory, we demonstrate that `market...
Persistent link: https://www.econbiz.de/10005675388
We asked subjects to self-select into one of two constests, "coin" or "die." The winner in each of the contest is the person with most correct guesses of 20 coin flips or 20 rolls of a die, respectively. Most subjects reported that they belived that most people would go to the "coin" group. They...
Persistent link: https://www.econbiz.de/10005675395
We study the Nash bargaining solution of a problem in which two agents bargain over an uncertain outcome. Under the assumptions of risk neutrality and of constant absolute risk aversion, we study the way that solution varies, ex ante, when we vary the beliefs of one agent. Changing an agent`s...
Persistent link: https://www.econbiz.de/10005675396
This paper argues that when organizations are imperfect in the sense that members may make mistakes and messages may be distorted, then the inner structure of the organization should be explicitly modeled. This paper proposes a framework for studying games between imperfect organizations.
Persistent link: https://www.econbiz.de/10005489264
Nash equilibrium is often interpreted as a steady state in which each player holds the correct expectations about the other players` behavior and acts rationally. This paper investigates the robustness of this interpretation when players` preferences are affected by their forecasts about the...
Persistent link: https://www.econbiz.de/10005489268