We analyze the nature of optimal contracts in a dynamic model of repeated (and persistent) adverse selection and moral hazard. In particular we consider the case of surgeons who diagnose patients and then decide whether to perform an operation, and if so, whether to exert a costly but...

This paper presents an overlapping generations model to explain why humans live in families rather than in other pair groupings. Since most non-human species are not familial, something special must be behind the family. It is shown that the two necessary features that explain the origin of the...

In many tournaments investments are made over time and conducting a review only once at the end, or also at points midway through, is a strategic decision of the tournament designer. If the latter is chosen, then a rule according to which the results of the different reviews are aggregated into...

This paper undertakes a careful examination of the concept of conditional probability and its use. The ideas are then applied to resolve a conceptual puzzle related to Savage's "Sure-Thing Principle."

Maskin and Riley (2003) and Lebrun (2006) prove that the Bayes-Nash equilibrium of first-price auctions is unique. This uniqueness requires the assumption that a buyer never bids above his value. We demonstrate that, in asymmetric first-price auctions (with or without a minimum bid), the...

The purpose of this work is to offer for any zero-sum game with a unique strictly mixed Nash equilibrium, a measure for the risk when deviating from the Nash equilibrium. We present two approaches regarding the nature of deviations; strategic and erroneous. Accordingly, we define two models. In...

We model constitutions by effectivity functions. We assume that the constitution is common knowledge among the members of the society. However, the preferences of the citizen are private information. We investigate whether there exist decision schemes (i. e., functions that map profiles of...

As a selling mechanism, auctions have acquired a central position in the free market economy all over the globe. This development has deepened, broadened, and expanded the theory of auctions in new directions. This chapter is intended as a selective update of some of the developments and...

We provide an extension of the Condorcet Theorem. Our model includes both the Nitzan-Paroush framework of “unequal competencies” and Ladha’s model of “correlated voting by the jurors”. We assume that the jurors behave “informatively”, that is, they do not make a strategic use of...

We formulate a way to study whether the asymmetry of buyers (in the sense of having different prior probability distributions of valuations) is helpful to the seller in private-value auctions (asked first by Cantillon [2001]). In our proposed formulation, this question corresponds to two...