Several contractual situations are such that the parties may 'step out' of negotiations and take up outside opportunities only if there is mutual consent to do so. Examples include employer - employee negotiations, divorce and inheritance procedures, and arbitration. To analyse such cases we...

After reviewing the evidence for status quo maintenance (SQM), I consider how to reconcile SQM with traditional consumer theory. Behavioural economists usually let agents' preferences change as a function of their endowments, treating the same person with different endowments as a set of...

In an experimental study we examine a variant of the 'minimum effort game', a coordination game with Pareto ranked equilibria and risk considerations pointing to the least efficient equilibrium. We focus on the question whether simple cues such as smiles, winks and handshakes could be recognised...

In Bayesian game theory, each player obeys the Savage axioms and there is common knowledge of this. The author shows that two of the less controversial axioms (ordering and dominance) are incompatible with some elementary game theoretic principles. He furthermore argues that his impossibility...