This paper shows how the fear of signaling distrust can endogenously lead to incomplete contractual agreements. We consider a principal agent relationship where the agent may be trustworthy (dedicated to the project) or not. The principal may trust the agent (i.e. have a high belief of facing a...

We study the evolution of preferences under perfect and almost perfect observability in symmetric 2-player games. We demonstrate that if nature can choose from a sufficiently general preference space, which includes preferences over outcomes that may depend on the opponent's preference-type,...