We consider a simple CAPM with heterogenous expectations on assets' mean returns and homogenous expectations on the covariance of returns. In this model alpha-opportunities naturally arise in a financial market equilibrium. We show that that the hunt for alpha-opportunities is a zero-sum game...

In this note we show that no solution to coalition formation games can satisfy a set of axioms that we propose as reasonable. Our result points out that solutions to the coalition formation cannot be interpreted as predictions of what would be resting points for a game in the way stable...

We study learning in finitely repeated 2x2 normal form games, when players have incomplete information about their opponents' payoffs. In a laboratory experiment we investigate whether players (a) learn the game they are playing, (b) learn to predict the behavior of their opponent, and (c) learn...

We provide theoretical conjectures about and experimental evidence on the emergence of redistributive societies. Individuals first vote on a distribution rule with their feet and then invest and redistribute total income according to the chosen rule. We vary the individuals’ information about...