We say that a social choice rule is implementable with (small) transfers if one can design a mechanism whose set of equilibrium outcomes coincides with that specified by the rule but the mechanism allows for (small) ex post transfers among the players. We then show in private-value environments...

A game of incomplete information can be decomposed into a basic game and an information structure. The basic game defines the set of actions, the set of payoff states the payoff functions and the common prior over the payoff states. The information structure refers to the signals that the...

In this paper, I study the wage a firm sets to attract high abilityworkers (hipo's) in situationsof unemployment. I show that the higher unemployment, the larger afirm's incentives to sorthigh and low ability workers. Moreover, workers will signal their(high) ability in situationsof (high)...

We provide a game theoretic analysis of how power shapes the clarity of communication. We analyze information transmission in a cheap talk bargaining game between an informed Sender and an uninformed Receiver. Theoretically, we find that the maximum amount of information that can be transmitted...

I consider a situation in which heterogenous senders (applicants) compete in order to be selected by one receiver (employer). Productivity is private information to the senders, and the receiver processes imperfect signals (applications) to screen among applicants. The information-processing...

We test the Average Credible Deviation Criterion (ACDC), a stability measure and refinement for cheap talk equilibria introduced in De Groot Ruiz, Offerman & Onderstal (2011b). ACDC has been shown to be predictive under general conditions and to organize data well in previous experiments meant...

Currently no refinement exists that successfully selects equilibria across a wider range of Cheap Talk games. We propose a generalization of refinements based on credible deviations, such as neologism proofness and announcement proofness. According to our Average Credible Deviation Criterion...

In the past, many refinements have been proposed to select equilibria in cheap talk games. Usually, these refinements were motivated by a discussion of how rational agents would reason in some particular cheap talk games. In this paper, we propose a new refinement and stability measure that is...

We consider a game played by a state sponsor of terrorism, a terrorist group, and the target of terrorist attacks. The sponsoring state wishes to see as much damage inflicted on the target of attack as possible, but wishes to avoid retaliation. To do so, his relationship with the terrorist group...

The recent global crisis has forced many countries to a tight fiscal discipline. As a consequence, the cultural sectors in those countries have experienced severe budget cuts. In this context, disparate suggestions for additional sources of revenue available to public institutions have emerged....