Norde et al.[Games Econ. Behav. 12 (1996) 219] proved that none of the equilibrium concepts in the literature on equilibrium selection in finite strategic games satisfying existence is consistent. A transition to set-valued solution concepts overcomes the inconsistency problem: there is a...

The standard framework for analyzing games with incomplete information models players as if they have an infinite depth of reasoning. This paper generalizes the type spaces of Harsanyi (1967-1968) so that players can have a finite depth of reasoning. The innovation is that players can have a...

We investigate the scope for cooperation within a community engaged in repeated reciprocal interactions. Players seek the help of others and approach them sequentially according to some fixed order, that is, a ranking pro file. We study the ranking pro files that are most e ffective in...

We investigate the limiting behavior of trader wealth and prices in a simple prediction market with a finite set of participants having heterogeneous beliefs. Traders bet repeatedly on the outcome of a binary event with fixed Bernoulli success probability. A class of strategies, including...

Networks can have an important effect on economic outcomes. Given the complexity of many of these networks, agents will generally not know their structure. We study the sensitivity of game-theoretic predictions to the specification of players' (common) prior on the network in a setting where...

We identify a new mechanism through which cultural diversity affects economic outcomes, based on a model of culture as shared cognition. Under this view, cultural diversity matters because it increases strategic uncertainty. The model can help better understand a variety of disparate evidence,...

Standard economic models cannot capture the fact that information is often ambiguous, and is interpreted in multiple ways. Using a framework that distinguishes between the language in which statements are made and the interpretation of statements, we demonstrate that, unlike in the case where...

This paper models an agent in an infinite horizon setting who does not update according to Bayes' Rule, and who is self-aware and anticipates her updating behavior when formulating plans. Choice-theoretic axiomatic foundations are provided. Then the model is specialized axiomatically to capture...

We study the problem of testing an expert whose theory has a learnable and predictive parametric representation, as do standard processes used in statistics. We design a test in which the expert is required to submit a date T by which he will have learned enough to deliver a sharp, testable...

We examine Popper's falsifiability within an economic model in which a tester hires a potential expert to produce a theory. Payments are contingent on the performance of the theory vis-a-vis data. We show that if experts are strategic, falsifiability has no power to distinguish scientific...