In this paper I demonstrate the existence an initial incomplete contract that can subsequently be renegociated to the set of first best allocations in a fairly geneal principal-agent model when the state space is continuous.

We try to show that the use of alternating decision making in an infinitely repeated prisoners' dilemma type game may enable sophisticated players to achieve perpetual cooperation starting from any initial position and without any prior communication, and that the ability of players to do so...

The payoffs of a symmetric 2x2 coordination game are perturbed by agent-specific heterogeneity. Individuals observe a (possibly sampled) history of play, which forms the initial hypothesis for an opponent's behaviour. Seedings beliefs in this manner, they iteratively reason toward a Bayesian...

Several studies found ancillary benefits of environmental policy to be of considerable size. These additional private benefits imply not only higher cooperative but also noncooperative abatement targets. However, beyond these largely undisputed important quantitative effects, there are...

In this paper we investigate the necessary ingredients for an accurate model of belief formation. Using experimental data from a previous experiment, we bring in a new group of subjects whose job it is to predict the action choices of the subjects from the previous experiment. While the rules we...

In this paper we present a two stage game of political lobbying for policies designed to enhance environmental quality. Unlike previous work which has tended to assume perfect monitoring of environmental quality in lobbying games we allow for imperfect monitoring of environmental quality. We...