We report experimental evidence on the effect of observability of actions on bank runs. We model depositors' decision-making in a sequential framework, with three depositors located at the nodes of a network. Depositors observe the other depositors' actions only if connected by the network....

This paper theoretically assesses the role that uncertainty plays in the intensity of conflicts. The standard two-player rent-seeking contest model (Tullock, 1980) is extended to allow for privately known subjective values of the prize. The conflict is modeled as a Bayesian game on which each...

Extralegal and rebel organizations often extort civilians to raise funds for their operations. A key issue in this process is overcoming informational asymmetries regarding extortionists' membership in the extralegal organization. In this paper, I examine how victims determine if an extortionist...

We define a generalized state-space model with interactive unawareness and probabilistic beliefs. Such models are desirable for potential applications of asymmetric unawareness. Applying our unawareness belief structures, we show that the common prior assumption is too weak to rule out...

Under what conditions can cooperation be sustained in a network of strangers? Here we study the role of institutions and uncover a new behavioral foundation for the use of monetary systems.In an experiment, anonymous subjects could cooperate or defect in bilateral random encounters. This...

We report experimental evidence on the effect of observability of actions on bank runs. We model depositors' decision-making in a sequential framework, with three depositors located at the nodes of a network. Depositors observe the other depositors' actions only if connected by the network. A...

I study how choice behavior given unawareness of an event differs from choice behavior given subjective belief of zero probability on that event. Depending on different types of unawareness the decision-maker suffers, behavior under unawareness is either incomparable with that under zero...

We provide a syntactic model of unawareness. By introducing multiple knowledge modalities, one for each sub-language, we specifically model agents whose only mistake in reasoning (other than their unawareness) is to underestimate the knowledge of more aware agents. We show that the model is a...

Does monitoring past conduct facilitate intertemporal cooperation? We designed an experiment characterized by strategic uncertainty and multiple equilibria where coordinating on the efficient outcome is a challenge. Participants, interacting anonymously in a group, could pay a cost either to...