We analyze first-price equilibrium bidding behavior of capacity-constrained firms in a sequence of two procurement auctions. In the model, firms with a cost advantage in completing the project auctioned off at the end of the sequence may enter the unfavored first auction hoping to lose it....

We introduce a new method of varying risk that bidders face in first-price and second-price private value auctions. We find that decreasing bidders’ risk in first-price auction reduces the degree of overbidding relative to the risk-neutral Bayesian Nash equilibrium prediction.This finding is...

We introduce a new method of varying risk that bidders face in first-price and second-price private value auctions. We find that decreasing bidders’ risk in first-price auction reduces the degree of overbidding relative to the risk-neutral Bayesian Nash equilibrium prediction.This finding is...

Noting that a full characterization of Nash-implementation is given using a canonical-mechanism and Maskin''s theorem (Maskin, 1999) is shown using a mechanism with Saijo''s type of strategy space reduction (Saijo, 1988), this paper fully characterizes the class of Nash-implementable social...

We introduce the concept of a transferable utility game with uncertainty (TUU-game). In a TUU-game there is uncertainty regarding the payoffs of coalitions. One out of a finite number of states of nature may materialize and conditional on the state, the players are involved in a particular...

A model of belief dependent preferences in finite multi-stage games with observable actions isproposed. It combines two dissimilar approaches: incomplete information (Levine, 1998) andintentionality (Dufwenberg and Kirchsteiger, 2004; Falk and Fischbacher, 2006). Incompleteinformation is important...

Inspired by the behavior in repeated guessing game experiments, we study adaptive play bypopulations containing individuals that reason with different levels of cognition. Individualsplay a higher order best response to samples from the empirical data on the history of play, wherethe order of...

Single-plateaued preferences generalize single-peaked preferences by allowing for multiple bestelements. These preferences have played an important role in areas such as voting,strategy-proofness andmatching problems. We examine the notion of single-plateauedness in a choice-theoretic...

We study duopolistic competition in a differentiated market with firms setting prices and quantities, without explicitly imposing market clearing. Unlike the commonly adopted assumption of profit maximizing firms, we assume firm behavior to be shaped by a Darwinian dynamic: the less fitter firm...

We consider agents whose language can only express probabilistic beliefs that attach a rationalnumber to every event. We call these probability measures rational. We introduce the notion of arational belief hierarchy, where the first order beliefs are described by a rational measure overthe...