We consider a market with "red" and "green" workers, where labels are payoff irrelevant. Workers may acquire skills. Skilled workers search for vacancies, while firms search for workers. A unique symmetric equilibrium exists in which color is irrelevant. There are also asymmetric equilibria in...

In a population with a local interaction structure, where individuals interact with their neighbors and learning is by way of imitating a successful neighbor, cooperation is shown to be a stable strategy that cannot easily be eliminated from the population.

The authors study a population of agents, each of whom can be an altruist or an egoist. Altruism is a strictly dominated strategy. Agents choose their actions by imitating others who earn high payoffs. Interactions between agents are local, so that each agent affects, and is affected by, only...

We study the long-run sustainability of reputations in games with imperfect public monitoring. It is impossible to maintain a permanent reputation for playing a strategy that does not play an equilibrium of the game without uncertainty about types. Thus, a player cannot indefinitely sustain a...

We study transactions that require investments before trading in a competitive market, when forward contracts fixing the transaction price are absent. We show that, despite the market being perfectly competitive and subject to arbitrarily little uncertainty, the inability to jointly determine...

Consider two agents who learn the value of an unknown parameter by observing a sequence of private signals. The signals are independent and identically distributed across time but not necessarily across agents. We show that when each agent's signal space is finite, the agents will commonly learn...