We propose two characteristics of beliefs and study their role in shaping the set of rationalizable strategy profiles in games with incomplete information. The first characteristic, type-sensitivity, is related to how informative a player thinks his type is. The second characteristic, optimism,...

We study the problem of allocating m identical items among nm agents with unit demand and private value for consuming the good. We allow payments and focus on dominant-strategy implementation. In the absence of an auctioneer who can absorb payments collected from the agents, the payments must be...

This paper presents a strategic model of common value elections with endogenous information acquisition. It proves that majoritarian elections can fail to aggregate information when voters have heterogeneous skills and provides necessary and sufficient conditions for information aggregation....

This paper studies the value of private information in strictly competitive interactions in which there is a trade-off between (i) the short-run gain of using information, and (ii) the long-run gain of concealing it. We implement simple examples from the class of zero-sum repeated games with...

We investigate an extension of the notion of backward induction to dynamic games with imperfect information and provide a doxastic characterization of it. Extensions of the idea of backward induction were proposed by Penta (2009) and later by Perea (2014), who also provided a doxastic...

A group of rational individuals with common interest need to select one of two outcomes. The optimal decision depends on whether certain premises or pieces of evidence are established as being true, and each member receives a noisy signal of the truth value of the relevant premises. Should the...

We study a stochastic model of influence where agents have “yes” or “no” inclinations on some issue, and opinions may change due to mutual influence among the agents. Each agent independently aggregates the opinions of the other agents and possibly herself. We study influence processes...

We propose a dynamic framework where the rationality of a playerʼs choice is judged on the basis of the actual beliefs that he has at the time he makes that choice. The set of “possible worlds” is given by state-instant pairs (ω,t), where each state specifies the entire play of the game....

We consider the dynamics of reasoning by general rules (theories) and by specific cases (analogies). When an agent faces an exogenous process, we show that, under mild conditions, if reality happens to be simple, the agent will converge to adopt a theory and discard analogical thinking. If,...