We characterize the outcomes of games when players may make binding offers of strategy contingent side payments before the game is played. This does not always lead to efficient outcomes, despite complete information and costless contracting. The characterizations are illustrated in a series of...

We examine a legislative voting game where decisions are being made over both ideological and distributive dimensions, and legislators' preferences are separable over the two dimensions. In equilibrium legislators prefer to make proposals for the two dimensions together, rather than offering...

We study countries choosing armament levels and then whether or not to go to war. We show that if the costs of war are not overly high or low, then all equilibria must involve "dove," "hawk," and "deterrent" strategies and the probability of war is positive (but less than one) in any given...

Exploiting small uncertainties on the part of opponents, players in long, finitely repeated games can maintain false reputations that lead to a large variety of equilibrium outcomes. Even cooperation in a finitely repeated prisoners' dilemma is obtainable. Can such false reputations be...

We examine a simple economic model of network formation where agents benefit from indirect relationships. We show that small-world features - -- short path lengths between nodes together with highly clustered link structures --- necessarily emerge for a wide set of parameters.

We examine price formation in a simple static model with asymmetric information, an infinite number of risk neutral traders and no noise traders. Here we re-examine four results associated with rational expectations models relating to the existence of fully revealing equilibrium prices, the...