We show that in a class of I‐agent mechanism design problems with evidence, commitment is unnecessary, randomization has no value, and robust incentive compatibility has no cost. In particular, for each agent i, we construct a simple disclosure game between the...

This paper develops a decision-theoretic approach to normal-form refinements of Nash equilibrium and provides characterizations of (normal-form) perfect equilibrium and proper equilibrium. The approach relies on a theory of single-person decision-making that is a non-Archimedean version of...

Dekel, Lipman and Rustichini (2001) (henceforth DLR) axiomatically characterized three representations of preferences that allow for a desire for flexibility and/or commitment. In one of these representations (ordinal expected utility), the independence axiom is stated in a weaker form than is...

An important application of the theory of choice under uncertainty is to asset markets, and an important property in these markets is a preference for portfolio diversification. If an investor is an expected utility maximizer, then he is risk averse if, and only if, he exhibits a preference for...

The authors discuss the unity between the two standard approaches to noncooperative solution concepts for games. The decision-theoretic approach starts from the assumption that the rationality of the players is common knowledge. This leads to the notion of correlated rationalizability. It is...

Conventional Bayesian theory of choice under uncertainty, subjective expected utility theory, fails to satisfy the properties of admissibility and existence of well-defined conditional probabilities; weakly dominated acts may be chosen, and the usual definition of conditional probabilities...