We study information acquisition in a coordination game with incomplete information. To capture the idea that players can flexibly decide what information to acquire, we do not impose any physical restriction on feasible information structure. Facing an informational cost measured by reduction...

Firms strategically disclose product information in order to attract consumers, butrecipients often find it costly to process all of it, especially when products have complexfeatures. We study a model of competitive information disclosure by two senders, inwhich the receiver may garble each...

We study belief updating about relative performance in an ego-relevant task. Manipulating the perceived ego-relevance of the task, we show that subjects update their beliefs optimistically because they derive direct utility flows from holding positive beliefs. This finding provides a behavioral...

This paper discusses the importance of paradoxes of irrationality for managers by elaborating upon the rational basis for the adoption of non-equilibrium strategies in game theory. It does so by revisiting the one-shot Traveler's Dilemma game, proposing a solution which reconciles the anomaly...

The main insight of this paper is that moral behavior does not necessarily alleviate coordination problems or may even worsen them, if individuals possess different degrees of morality. We characterize heterogenous Alger-Weibull morality preferences in a canonical model of voluntary...

In this paper, I test the predictions of rational inattention theory using a laboratory experiment where one role in a two-player game faces cognitive costs to process information about a payoff-relevant state. I find that subjects who face these unobservable cognitive costs have state-dependent...

Fixing a game with uncertain payoffs, information design identifies the information structure and equilibrium that maximizes the payoff of an information designer. We show how this perspective unifies existing work, including that on communication in games (Myerson (1991)), Bayesian persuasion...

Fixing a game with uncertain payoffs, information design identifies the information structure and equilibrium that maximizes the payoff of an information designer. We show how this perspective unifies existing work, including that on communication in games (Myerson (1991)), Bayesian persuasion...