Optimal communication to a group often entails a trade-off between precision of information conveyed and common understanding (or approximate common knowledge) of the information within the group. We argue that an understanding of this trade-off is central in many contexts, including central...

We consider the role of the common prior for robust implementation in an environment with interdependent values. Specifically, we investigate a model of public good provision which allows for negative and positive informational externalities. In the corresponding direct mechanism, the agents'...

We review some recent research that explores the relationship between asset-price volatility and financial fragility when markets and contracts are incomplete. (JEL: E5, G2) Copyright (c) 2005 The European Economic Association.