We propose and axiomatize a new model of incomplete preferences under uncertainty, which we call hope-and-prepare preferences. An act is considered more desirable than another when, and only when, both an optimistic evaluation, computed as the welfare level attained in a best-case scenario, and...

The pricing kernel is an important tool for understanding asset prices, expected returns, and investor preferences. However, empirical findings often reveal deviations from theoretical predictions, leading to the so-called "pricing kernel puzzle". This article explores the pricing kernel under...

Heterogeneous beliefs among market participants can lead to questionable speculative trading that goes beyond any risk-sharing motives. We demonstrate that such unwarranted betting behavior in market equilibrium can be mitigated by introducing nonlinear pricing for ambiguous contracts, without...

This paper analyzes the welfare effects of private and unilateral disclosure of sensitive information in a sequential bargaining context. We consider a model where two sellers each propose a take-it-or-leave-it price for a homogeneous good to a single buyer. The buyer accepts or rejects the...

In this work, we study a class of stationary mean-field games of singular stochastic control under model uncertainty. The representative agent adjusts the dynamics of an Itô-diffusion via onesided singular stochastic control, aiming to maximize a long-term average expected profit criterion. The...

We study the problem of optimal investment in brown (carbon-intensive) production amid climate change and the impact of rising global temperatures. Our approach is based on a mean-field model of firms that produce goods whose productivity is adversely affected by temperature-related damages,...

We continue the discussion of the taxation game following our presentation in [12]. Our concept describes a cooperative game played between a set of jurisdictions (" countries"). These players admit the operation of a multinational enterprise (MNE, the "firm") within their jurisdiction. The...

Berge equilibrium offers an alternative to Nash equilibrium in game theory, emphasizing cooperative stability rather than individual optimization. Despite recent interest, a systematic study of Berge equilibria in finite normal form games is still lacking, with fundamental questions like...

We study a dynamic game in which a monopolistic seller sequentially discloses information about a binary state to a consumer through priced experiments. The consumer privately observes a binary signal which influences her willingness to pay for information. We show that if buyer types favor...

We study a mean-field game of optimal stopping and investigate the existence of strong solutions via a connection with the Bank-El Karoui's representation problem. Under certain continuity assumptions, where the common noise is generated by a countable partition, we show that a strong randomized...