We propose a unified framework to study relational contracting and hold-up problems in infinite horizon stochastic games. We first illustrate that with respect to long run decisions, the common formulation of relational contracts as Pareto-optimal public perfect equilibria is in stark contrast...

Random samples of the Moscow and New York populations were compared in their attitudes towards free markets by administering identical telephone interviews in the two countries in May, 1990. Although the Soviet respondents were somewhat less likely to accept exchange of money as a solution to...

No abstract.

In 2008, the Swedish property tax was reformed and a cap on yearly tax liabilities was introduced. A large fraction of owner occupied houses was subject to a substantial decrease in the tax. When the reform was announced, most analysts projected – in line with tax capitalization theory –...

Theories of bounded rationality are typically characterized over an exhaustive data set. How does one tell whether observed choices are consistent with a theory if the data is incomplete? How can out-of-sample predictions be made? What can be identified about preferences? This paper aims to...

Why did evolution not give us a utility function that is offspring alone? Why do we care intrinsically about other outcomes, such as food, and what determines the intensity of such preferences? A common view is that such other outcomes enhance fitness and the intensity of our preference for a...

Why did evolution not give us a utility function that is offspring alone? Why do we care intrinsically about other outcomes, food, for example, and what determines the intensity of such preferences? A common view is that such other outcomes enhance fitness and the intensity of our preference for...

This paper provides an evolutionary foundation for our capacity to attribute preferences to others. This ability is intrinsic to game theory, and is a key component of "Theory of Mind", perhaps the capstone of social cognition. We argue here that this component of theory of mind allows organisms...