I present a peer effects model for count data using a static game of incomplete information. I provide sufficient conditions under which the game equilibrium is unique. I estimate the model's parameters using the Nested Partial Likelihood approach and establish asymptotic properties of the...

We study strategic investment decisions in multi-stage contests with heterogeneous players. Our theoretical model of a round-robin rank-order tournament predicts that players conserve resources in a current contest to spend more in the subsequent contest if the degree of heterogeneity in the...

This paper studies equilibrium selection in intertemporal coordination problems with delay options. The risk-dominant action of the underlying one-shot game is selected when frictions are arbitrarily small. Larger frictions introduce real option effects in the model and inhibit coordination.

We investigate games whose Nash equilibria are mixed and are unstable under fictitious play-like learning processes. We show that when players learn using weighted stochastic fictitious play and so place greater weight on more recent experience that the time average of play often converges in...

Evolutionary game theory provides a fresh perspective on the prospects that agents with heterogeneous expectations might eventually come to agree on a single expectation corresponding to the efficient markets hypothesis. We establish conditions where agreement on a unique forecast is stable, but...

Tests on simulated data from an asset pricing model with heterogeneous forecasts show excess variance in the price and ARCH effects in the returns, features not explained by the strong version of the efficient markets hypothesis. An evolutionary game theory dynamic describes how agents switch...

Excessive optimism is a prominent explanation for bargaining delays. Recent results demonstrate that optimism plays a subtle role in bargaining, and its careful analysis may shed valuable insights into negotiation behavior. This article reviews some of these results, focusing on the following...

The new learning dynamic of Brown, von Neuman and Nash (1950) is introduced to macroeconomic dynamics via the cobweb model with rational and naive forecasting strategies. This dynamic has appealing properties such as positive correlation and inventiveness. There is persistent heterogeneity in...

While ARCH/GARCH equations have been widely used to model financial market data, formal explanations for the sources of conditional volatility are scarce. This paper presents a model with the property that standard econometric tests detect ARCH/GARCH effects similar to those found in asset...