Players choose a stochastic choice rule, assigning a probability of “investing” as a function of a state. Players receive a return to investment that is increasing in the proportion of others who invest and the state. In addition, they incur a small cost associated with adapting the...

We study the optimality of debt through the interaction between security design and information acquisition. An impatient seller designs a security backed by her asset in place and a buyer decides whether to buy the security in order to provide liquidity. Facing different securities, the buyer...

Recent technology advances have enabled firms to flexibly process and analyze sophisticated employee performance data at a reduced and yet significant cost. We develop a theory of optimal incentive contracting where the monitoring technology that governs the above procedure is part of the...

We propose a theory of security design in financing entrepreneurial production, positing that the investor can acquire costly information on the entrepreneur's project before making the financing decision. When the entrepreneur has enough bargaining power in security design, the optimal security...

We study flexible information acquisition in a coordination game. "Flexible" acquisition means that players choose not only how much but also what kind of information to acquire. Information acquisition has a cost proportional to reduction of entropy. Hence, players will collect the information...

The evolution equation determines how frequencies of strategies in the population change (Traulsen & Hauert (2009)), where the change indicates velocities (Bowles (2004),Weibull (1997),Sigmund (2010)). In this paper, based on the laboratory Rock-Paper-Scissors (RPS) game experiments and from the...

The effect on housing prices of policies that promote educational equity is inconclusive. This paper first presents a theoretical model to investigate the impact of policies that reduce the probability of entrance to prestigious schools and derives testable predictions on housing prices. Then,...

The effect of policies that promote educational equity on housing prices is inclusive. We first present a theoretical model to investigate the impact of policies that reduce the prestigious school entrance probability and derive testable predictions on housing prices. Then, we use a unique...