Consider two agents who learn the value of an unknown parameter by observing a sequence of private signals. The signals are independent and identically distributed across time but not necessarily across agents. We show that when each agent's signal space is finite, the agents will commonly learn...

Many refinements of Nash equilibrium yield solution correspondences that do not have closed graph in the space of payoffs or information. This has significance for implementation theory, especially under complete information. If a planner is concerned that all equilibria of his mechanism yield a...

We introduce a class of strategies that generalizes examples constructed in two-player games under imperfect private monitoring. A sequential equilibrium is belief-free if, after every private history, each player's continuation strategy is optimal independently of his belief about his...

Wilson (1987) criticizes the existing literature of game theory as relying too much on common-knowledge assumptions. In reaction to Wilson's critique, the recent literature of mechanism design has started to employ stronger solution concepts such as dominant strategy incentive compatibility, and...

We conducted a field experiment to test the benefit from late bidding (sniping) in online auction markets. We compared sniping to early bidding (squatting) in auctions for newly-released DVDs on eBay. Sniping led to a statistically significant increase in our average surplus. However, this...

Consider two agents who learn the value of an unknown parameter by observing a sequence of private signals. The signals are independent and identically distributed across time but not necessarily across agents. We show that that when each agent's signal space is finite, the agents will commonly...

Is there reason to believe that our brains have evolved to make efficient decisions so that the details of the internal process are irrelevant? I develop a model which illustrates a limitation of adaptive processes: improvements tend to come in the form of kludges. A kludge is a marginal...

We offer a theory of the sunk cost fallacy as an optimal response to limited memory. As new information arrives, a decision-maker may not remember all the reasons he began a project. The sunk cost gives additional information about future profits and informs subsequent decisions. The Concorde...