This paper considers a modified principal-agent environment, where principals have options to either incentivize agents, or trigger agents' reciprocity. Because the production is uncertain, principals' fixed rate transfer can be easily interpreted as good intention. Theory suggests that...

This note investigates a set of dynamic versions of the level-k (LK) and cognitive hierarchy (CH) models in repeated normal-form games. Conventional LK and CH models assume a reasoning process that does not allow learning. This can be a restrictive assumption: When facing a repeated game,...