Consider an infinitely repeated game where each player is characterized by a "type" which may be unknown to the other players in the game. Suppose further that each player's belief about others is independent of that player's type. Impose an absolute continuity condition on the ex ante beliefs...

This paper deals with trade volume and distribution of surplus in markets subject to adverse selection. In a model where two qualities of a good exist, I show that if trade is decentralized (i.e. conducted via random pairwise meetings of agents), then all units of the good are traded, and all...

In each stage of a repeated game with private monitoring, the players receive payoffs and privately observe signals which depend on the players' actions and the state of world. I show that, contrary to a widely held belief, such games admit a recursive structure. More precisely, I construct a...

This paper discusses how numerical techniques may be used to solve the simultaneous functional equations that arise in general dynamic stochastic games. Unlike the conventional linear-quadratic approach, our methods may be used to address general model specifications that may include...

We apply the dynamic stochastic framework proposed in recent evolutionary literature to a class of coordination games played simultaneously by the entire population. In these games payoffs, and hence best replies, are determined by a summary statistic of the population strategy profile. We...

The literature on games of strategic complementarities (GSC) has focused on pure strategies. I introduce mixed strategies and show that, when strategy spaces are one-dimensional, the complementarities framework extends to mixed strategies ordered by first-order stochastic dominance. In...

This paper analyzes innovation adoption when uncertainty about its profitability cannot be resolved immediately. Firms begin with a common estimate of the probability of high demand. If any adopts, all observe realized demand. An increase in the initial estimate can decrease the equilibrium...

Extending some existing literature, this paper formalizes the idea that intergenerational transfers occur because people care about the "characteristics" (i.e quantity and quality) of their offspring, rather than their children's welfare per se or consumption. The model analyzes this transfer...

We study the effects of outsiders' threat and consecutive offers in the two-person bargaining model of Shaked and Sutton (1984). In our first model, there are no outsiders and the firm can make two consecutive offers for every given number of periods. Our first model has the same unique...

This paper considers the existence and computation of Markov perfect equilibria in games with a "monotone" structure. Specifically, it provides a constructive proof of the existence of Markov perfect equilibria for a class of games in which a) there is a continuum of players, b) each player has...