We introduce a game-theoretic model with switching costs and endogenous references. An agent endogenizes his reference strategy and then, taking switching costs into account, he selects a strategy from which there is no profitable deviation. We axiomatically characterize this selection procedure...

We present a new approach to studying equilibrium dynamics in a class of stochastic games with a continuum of players with private types and strategic complementarities. We introduce a suitable equilibrium concept, called Markov Stationary Nash Distributional Equilibrium (MSNDE), prove its...

We analyze information design games between two designers with opposite preferences and a single agent. Before the agent makes a decision, designers repeatedly disclose public information about persistent state parameters. Disclosure continues until no designer wishes to reveal further...

We study the foundations for the development of optimal randomization in mixed strategy games. We consider a population of children and adolescents (7 to 16 years old) and study in the laboratory their behavior in a nonzero sum, hide‐and‐seek game with a unique interior mixed strategy...

Healthcare payment systems influence to a great extent the hospitals' investment decision and thereby, their ability to treat patients. A payment system is optimal provided it incentivises hospitals to undertake an investment level that is appropriate, when considering treatment costs, patients'...

We study how the presence of promotion competition in the labor market affects household specialization patterns. By embedding a promotion tournament model in a household setting, we show that specialization can emerge as a consequence of competitive work incentives. This specialization outcome,...

It is well known that non-renegotiable contracts with third parties may have an effect on the outcome of a strategic interaction and thus serve as a commitment device. We address this issue when contracts are renegotiable. More precisely, we analyze the equilibrium outcomes of two-stage games...

Many strategic interactions in the real world take place among delegates empowered to act on behalf of others. Although there may be a multitude of reasons why delegation arises in reality, one intriguing possibility is that it yields a strategic advantage to the delegating party. In the case...

It is well known that delegating the play of a game to an agent via incentive contracts may serve as a commitment device and hence provide a strategic advantage. Previous literature has shown that any Nash equilibrium outcome of an extensive-form principals-only game can be supported as a...

Healthcare payment systems influence to a great extent the hospitals' investment decision and thereby, their ability to treat patients. A payment system is optimal provided it incentivises hospitals to undertake an investment level that is appropriate, when considering treatment costs, patients'...