Two individuals are involved in a conflict situation in which preferences are ex ante uncertain. While they eventually learn their own preferences, they have to pay a small cost if they want to learn their opponent's preferences. We show that, for sufficiently small positive costs of information...

Consider a mechanism for the binary public good provision problem that is dominant strategy incentive compatible (DSIC), ex-post individually rational (EPIR), and ex-post budget balanced (EPBB). Suppose this mechanism has the additional property that the utility from participating in the...

Riedel and Sass (2013) study complete information normal form games in which ambiguity averse players use ambiguous randomization strategies, in addition to pure and mixed strategies. The solution concept they propose, the Ellsberg equilibrium, is a coarsening of the classical Nash equilibrium....

We study investments in R&D and the formation of R&D clusters of firms which are competitors in the market. In a three stage game, firms first decide on long-term R&D investment, then form research clusters according to the unanimity game introduced in Bloch(1995), and finally compete in...

The seminal work of Fudenberg and Tirole (1985) on how preemption erodes the value of an option to wait raises general questions about the relation between models in discrete and continuous time and thus about the interpretation of its central result, relying on an "infinitely fine grid". Here...

In this paper, we propose a definition of Hypothesis Testing Equilibrium (HTE) for general signaling games with non-Bayesian players nested by an updating rule according to Hypothesis Testing model characterized by Ortoleva (2012). An HTE may be different from a sequential Nash equilibrium...

Knightian uncertainty leads naturally to nonlinear expectations. We introduce a corresponding equilibrium concept with sublinear prices and establish their existence. In general, such equilibria lead to Pareto inefficiency and coincide with Arrow-Debreu equilibria only if the values of net...

The value and the optimal exercise time of the perpetual American straddle is characterized by the unique solution of a single non-linear equation with one unknown variable.

¡os's theorem for (bounded) D-ultrapowers, D being the ultrafilter introduced by Kanovei and Shelah [Journal of Symbolic Logic, 69(1):159-164, 2004], can be established within Zermelo-Fraenkel set theory plus Countable Choice (ZF+ACw). Thus, the Transfer Principle for both Kanovei and Shelah's...

In this paper we provide a complete theoretical analysis of a two-dimensional degenerate non convex singular stochastic control problem. The optimisation is motivated by a storage-consumption model in an electricity market, and features a stochastic real-valued spot price modelled by Brownian...