Experimental evidence shows that the rational expectations hypothesis fails to characterize the path to equilibrium after an exogenous shock when actions are strategic complements. Under identical shocks, however, repetition allows adaptive learning, so that inertia in adjustment should fade...

Experimental evidence shows that the rational expectations hypothesis fails to characterize the path to equilibrium after an exogenous shock when actions are strategic complements. Under identical shocks, however, repetition allows adaptive learning, so that inertia in adjustment should fade...

The paper presents a large-population analog of fictitious play in which players learn from personal experience. In each period, only one player updates his beliefs about the strategy distribution in the population. Through analysis and examples, we justify the relevance of the single update...

Until recently, theorists considering the evolution of human cooperation have paid little attention to institutional punishment, a defining feature of large-scale human societies. Compared to individually-administered punishment, institutional punishment offers a unique potential advantage: the...

Until recently, theorists considering the evolution of human cooperation have paid little attention to institutional punishment, a defining feature of large-scale human societies. Compared to individually administered punishment, institutional punishment offers a unique potential advantage: the...

I study how a firm manages its reputation by investing in the quality of its product and censoring bad news. Without censorship, the threat of bad news provides strong incentives for investment. I highlight two discontinuities in the firm's maximum equilibrium payoff the introduction of...

The cobweb model where firms choose between rational and naive forecasting strategies has a 2-cycle when the slope of supply is greater than the slope of demand for a number of different dynamics describing the evolution of strategy choices. This paper proves that the 2-cycle is exponentially...

We study a firm's incentives to build and maintain reputation for quality, when quality is persistent and can be certified at a cost. We characterize all Markov-perfect equilibria where the firm's choices -i.e., timing of certification and investment– depend only on the firm's reputation. MPE...

I model a firm that invests in both the quality of its product and in providing information to the market. Consumers learn about the quality through both news the firm cannot influence and promotion it controls. This ability to promote creates and enhances incentives for investment. Promotion...

The paper studies a dynamic communication game in the presence of adverse selection and career concerns. A forecaster of privately known competence, who cares about his reputation, chooses the timing of the forecast regarding the outcome of some future event. We find that in all equilibria in a...