The mechanism design literature assumes too much common knowledge of the environment among the players and planner. We relax this assumption by studying mechanism design on richer type spaces. Copyright The Econometric Society 2005.

This paper proposes the solution concept of interim rationalizability, and shows that all type spaces that have the same hierarchies of beliefs have the same set of interim rationalizable outcomes. This solution concept characterizes common knowledge of rationality in the universal type space.

Recent trends toward greater central bank independence and the adoption of formal inflation targeting by several countries have served to emphasise the importance of communication policy. In this paper, we explore some of the economic effects of public information that arise whenever public...

We study games with strategic complementarities, arbitrary numbers of players and actions, and slightly noisy payoff signals. We prove limit uniqueness: as the signal noise vanishes, the game has a unique strategy profile that survives iterative dominance. This generalizes a result of Carlsson...

In a financial market where traders are risk averse and short lived and prices are noisy, asset prices today depend on the average expectation today of tomorrow's price. Thus (iterating this relationship) the date 1 price equals the date 1 average expectation of the date 2 average expectation of...

Recent trends toward greater central bank independence and the adoption of formal inflation targeting by several countries have served to emphasize the importance of communication policy. In this paper, we explore some of the economic effects of public information that arise whenever public...

Common knowledge plays an important role in coordination problems and coordination problems are central to many areas of economic policy. In this paper, I review some common-knowledge puzzles culminating in the electronic-mail game. These puzzles may seem distant from practical concerns....

We analyze the welfare consequences of a monopolist having additional information about consumers' tastes, beyond the prior distribution; the additional information can be used to charge different prices to different segments of the market, i.e., carry out "third degree price discrimination." We...

The aim of cost-utility analysis is to support decision making in healthcare by providing a standardised mechanism for comparing resource use and health outcomes across programmes of work. The focus of this paper is the denominator of the cost-utility analysis, specifically the methodology and...