Cooperative concepts of renegotiation in repeated games have typically assumed that Pareto-ranked equilibria could not coexist within the same renegotiation-proof set. With explicit renegotiation, however, a proposal to move to a Pareto-superior equilibrium can be deterred by a different...

Private politics are often introduced by market participants in the absence of public regulation. But when is private politics enough, efficient, or better than administratively costly public regulation? We present a novel framework in which we can study the interaction between regulation,...

This paper considers a model of reference-dependent utility in which the individual makes a conscious choice of her reference point for future consumption. The model incorporates the combination of loss aversion and anticipatory utility as competing forces in the determination of the optimal...

The standard framework for analyzing games with incomplete information models players as if they form beliefs about their opponents' beliefs about their opponents' beliefs and so on, that is, as if players have an infinite depth of reasoning. This strong assumption has nontrivial implications,...

We propose to strengthen Popper's notion of falsifiability by adding the requirement that when an observation is inconsistent with a theory, there must be a "short proof" of this inconsistency. We model the concept of a short proof using tools from computational complexity, and provide some...

We study information acquisition in a exible framework with strategic complementarity or substitutability in actions and a rich set of externalities that are responsible for possible wedges between the equilibrium and the efficient acquisition of information. First, we relate the (in)efficiency...

I examine a class of utility maximization problems with a not necessarily law-invariant utility, and with a not necessarily law-invariant risk measure constraint. The objective function is an integral of some function U with respect to some probability measure P, and the constraint set contains...

In an important paper, Weinstein and Yildiz (2007) show that if players have an infinite depth of reasoning and this is commonly believed, types generically have a unique rationalizable action in games that satisfy a richness condition. We show that this result does not extend to environments...