We consider the contracting problem of a principal who faces an agent with private information and cannot commit to not renegotiate a chosen contract. To analyze this problem, we propose an infinite horizon negotiation protocol in which renegotiation is frictionless, executed without delay and...

Governments must usually take policy decisions with an imperfect knowledge of the economic actors' type or the actors' effort level. These issues are addressed within the framework of classic adverse selection or moral hazard models. I discuss in this paper how would the government's and the...

We study the role of information about the multiplier in a finitely repeated investment game. A high multiplier increases the reputational incentives of a trustee, leading to more repayments. Our perfect Bayesian equilibrium analysis shows that if the trustee is privately informed about the...

We study the economic consequences of opportunities for dishonesty in an environment where efficiency relevant behaviour is not contractible, but rather incentivized by informal agreements in an ongoing relationship. We document the repeated interaction between a principal and an agent who,...

Can fiscal policy raise utility for all in dynamic economies with unobservable agent heterogeneity, when missing credit and insurance markets affect incentives to invest in human capital? If so, should the state provide transfers to the poor in the form of cash or in kind? In an occupational...

Motivated by trying to better understand the norms that govern pedestrian traffic, I study symmetric two-player coordination games with independent private values. The strategies of "always pass on the left" and "always pass on the right" are always equilibria of this game. Some such games,...

We study the coevolution of cooperation, preferences and cooperative signals in an environment where individuals engage in a signaling-extended Prisoner's Dilemma. We identify a new type of evolutionary equilibrium -- a transitional equilibrium -- which is constituted and stabilized by the...

Do individuals choose how to a solve a dynamic game or is their mode of reasoning a type-like predisposition? We show experimentally that an individual’s propensity to forwardly or backwardly induct is a function of (i) her belief whether an opponent’s previous action was a trembling hand...

Humans reciprocate. We want to return favors we have received, but also respond appropriately to behavior that we regard as unfair against us. Whereas previous research has typically tried to isolate the most prominent explanations for reciprocal behavior - inherent preferences for reciprocity...