This paper considers a class of repeated signalling games to gain some intuitive insights into the effects and the desirability of modelling players in a dynamic game of incomplete information as being obstinate in the sense that their beliefs satisfy a support restriction. We demonstrate that...

We examine a strategic-choice handicap model in which males send costly signals to advertise their quality to females. Females are concerned with the net viability of the male with whom they mate, where net viability is a function of the male's quality and signal. We identify circumstances in...

This paper analyses the investment incentives given by contingent ownership structures that are prevalent in joint ventures. We consider a variation of the standard hold-up problem where two parties make relationship-specific investments sequentially in order to generate a joint surplus in the...

The paper analyzes the canonical hold-up model of Hart and Moore (1988) under the assumption that the courts can verify delivery of the good by the seller. We show that the first best can be achieved using simple "option contracts" which give the seller the right to decide whether or not trade...

We examine the evolutionary foundations of common equilibrium refinement ideas for extensive form games, such as backward and forward induction, by examining the limiting outcome of an evolutionary process driven by stochastic learning and (rare) mutations. We show that the limiting outcome in a...

This paper introduces a class of signalling games with response intersection to discuss the informational efficiency of a monopolistic financial market. For these games a necessary and sufficient condition for the existence of a fully revealing sequential equilibrium outcomes is derived....

Extreme adverse selection arises when private information has unboundedsupport, and market breakdown occurs when no trade is the only equilibriumoutcome. We study extreme adverse selection via the limit behavior of afinancial market as the support of private information converges to an...

This paper presents simple su±cient conditions under which optimal bunches inadverse-selection principal-agent problems can be characterized without using optimal controltheory.

In contest models with symmetric valuations, equilibrium payoffs are positiveshares of the value of the prize. In contrast to a bargaining situation, theseshares sum to less than one because a share of the value is lost due to rent-dissipation. We ask: can every such division into payoff shares...