Many economic problems can be formulated as dynamic games in which strategically interacting agents choose actions that determine the current and future levels of a single capital stock. We study necessary conditions that allow us to characterize Markov perfect Nash equilibria (MPNE) for these...

We present a duopoly model of strategic capital accumulation in continuous time with uncertainty, such that investment takes the form of singular control. Spot competition is of Cournot type. For this model there exists a parameterized and Pareto-rankable family of Markov perfect equiblibria in...

Can luck predict risk-taking behavior in games of chance? Economists have not widely studied this issue although overconfidence, optimism-, and pessimism bias have received substantial attention in recent years. In this study, we investigate how good and bad luck outcomes in a simple repeated...

This paper examines the ability of a policy maker to control equilibrium outcomes in a global coordination game; applications include currency attacks, bank runs, and debt crises. A unique equilibrium is known to survive when the policy is exogenously fixed. We show that, by conveying...

The paper reports an experimental study based on a variant of the popular Chinos game, which is used as a simple but paradigmatic instance of observational learning. There are three players, arranged in sequence, each of whom wins a fixed price if she manages to guess the total number of coins...

Questions remain as to whether results from experimental economics games are generalizable to real decisions in non-laboratory settings. Furthermore, important questions persist about whether social capital can help solve seemingly missing credit markets. I conduct two experiments, a Trust game...

Strategies of international risk management, as the implementation of tradable emission permits, feed back to the incentive structure of a treaty, like the Kyoto Protocol. Discussing the Kyoto Protocol the question was: Should there be any restrictions on the trading of emission permits or not?...

Most insurance companies publish few data on the occurrence and detection of insurance fraud. This stands in contrast to the previous literature on costly state verification, which has shown that it is optimal to commit to an auditing strategy, as the credible announcement of thoroughly auditing...

Most insurance companies publish few data on the occurrence and detection of insurance fraud. This stands in contrast to the previous literature on costly state verification, which has shown that it is optimal to commit to an auditing strategy, as the credible announcement of thoroughly auditing...

A theoretical model is adopted in order to explain incentives and actual safety behaviour for drivers, pedestrians and other road users which do not utilise motorised vehicles. A road user's outcome is supposed to be dependent on her individual actions and cares decided upon by other individuals...