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When the Punishment Must Fit the Crime: Remarks on the Failure of Simple Penal Codes in Extensive-Form Games

Mailath, George J.; Nocke, Volker; White, Lucy - C.E.P.R. Discussion Papers - 2004

In repeated normal-form games, simple penal codes (Abreu 1986, 1988) permit an elegant characterization of the set of subgame-perfect outcomes. We show that the logic of simple penal codes fails in repeated extensive-form games. We provide two examples illustrating that a subgame-perfect outcome...

Persistent link: https://www.econbiz.de/10005124002

Does One Soros Make a Difference? A Theory of Currency Crises with Large and Small Traders

Corsetti, Giancarlo; Dasgupta, Amil; Morris, Stephen; … - C.E.P.R. Discussion Papers - 2000

independently decide whether to attack a currency based on their private information about fundamentals. Even abstracting from … difference can be small, or null, depending on the relative precision of private information of the small and large investors …

Persistent link: https://www.econbiz.de/10005791850

Venture Capital, Patenting, and Usefulness of Innovations

Fabrizi, Simona; Lippert, Steffen; Norbäck, Pehr-Johan; … - C.E.P.R. Discussion Papers - 2011

We analyze incentives to develop entrepreneurial ideas for venture capitalists (VCs) and incumbent firms. If VCs are sufficiently better at judging an idea's value and if it is sufficiently more costly to patent low than high value ideas, VCs acquire valuable ideas, develop them beyond the level...

Persistent link: https://www.econbiz.de/10009643508

Prudence in Bargaining: The Effect of Uncertainty on Bargaining Outcomes

White, Lucy - C.E.P.R. Discussion Papers - 2006

We investigate the outcome of bargaining when a player’s pay-off from agreement is risky. We find that a risk-averse player typically increases his equilibrium receipts when his pay-off is made risky. This is because the presence of risk makes individuals behave 'more patiently' in bargaining....

Persistent link: https://www.econbiz.de/10005666445

Is It Trust we Model? An Attempt to Calculate the Non-Calculative

Rosenkranz, Stephanie; Weitzel, Utz - C.E.P.R. Discussion Papers - 2005

In this paper we characterize a situation in which non-calculative trust has to play a role in the decision to cooperate. We then analyse the given situation in game theoretical terms and distinguish those aspects of players’ decisions that are cooperative from those that may be interpreted as...

Persistent link: https://www.econbiz.de/10005792217

Pricing and Trust

Huck, Steffen; Ruchala, Gabriele K.; Tyran, Jean-Robert - C.E.P.R. Discussion Papers - 2007

We experimentally examine the effects of flexible and fixed prices in markets for experience goods in which demand is driven by trust. With flexible prices, we observe low prices and high quality in competitive (oligopolistic) markets, and high prices coupled with low quality in non-competitive...

Persistent link: https://www.econbiz.de/10005792278

Signal Accuracy and Informational Cascades

Pastine, Ivan; Pastine, Tuvana - C.E.P.R. Discussion Papers - 2005

In an observational learning environment, rational agents with incomplete information may mimic the actions of their …

Persistent link: https://www.econbiz.de/10005656436

The Paradox of Competence

Gersbach, Hans - C.E.P.R. Discussion Papers - 2004

We examine a model in which the public is unsure about the competence of a politician, and whether they are concerned about the long-term consequences of their decisions (statesman) or about the public’s opinion concerning their competence and preferences (populist). The main finding suggests...

Persistent link: https://www.econbiz.de/10005661555

Network Games with Incomplete Information

De Martí, Joan; Zenou, Yves - C.E.P.R. Discussion Papers - 2014

players' information. We demonstrate that there exists a unique Bayesian-Nash equilibrium. We characterize the equilibrium by … disentangling the information effects from the network effects and show that the equilibrium effort of each agent is a weighted … combinations of different Katz-Bonacich centralities where the decay factors are the eigenvalues of the information matrix while …

Persistent link: https://www.econbiz.de/10011096094

Efficient Competition through Cheap Talk: Competing Auctions and Competitive Search without Ex Ante Price Commitment

Kim, Kyungmin; Kircher, Philipp - C.E.P.R. Discussion Papers - 2013

We consider a frictional two-sided matching market in which one side uses public cheap-talk announcements so as to attract the other side. We show that if the first-price auction is adopted as the trading protocol, then cheap talk can be perfectly informative, and the resulting market outcome is...

Persistent link: https://www.econbiz.de/10011083306