Consider a finite data set where each observation consists of a bunde of contingent consumption chosen by an agent from a constraint set of such bundles.  We develop a general procedure for testing the consistency of this data set with a broad class of models of choice under risk and under...

This paper considers mechanism design problems in environments with ambiguity‐sensitive individuals. The novel idea is to introduce ambiguity in mechanisms so as to exploit the ambiguity sensitivity of individuals. Deliberate engineering of ambiguity, through ambiguous mediated communication,...

We derive necessary and sucient conditions for data sets composed of state-contingent prices and consumption to be consistent with two prominent models of decision making under uncertainty: variational preferences and smooth ambiguity. The revealed preference conditions for subjective expected...

We study the gains from trade in a model with endogenously variable markups. We show that the pro-competitive gains from trade are large if the economy is characterized by (i) extensive misallocation, i.e., large ineciencies associated with markups, and (ii) a weak pattern of cross-country...

This short paper proposes a didactic example on how to solve a multidimensional screening problem in the linear case. In the proposed example, shareholders of a cash-constrained firm propose to the firm management a recapitalization in counterpart of the distribution of future dividends. The...

A sender wishes to transmit a secret to a receiver through a communication network, where some nodes are controlled by an adversary. We characterize the directed networks for which there exist ε-secret and ε-strongly secure communication protocols (∀ε0): if all nodes are obedient the...

This paper introduces the concept of ordient for binary relations (preferences), a relative of the concept of gradient for functions (utilities). Ordients have a natural economic interpretation as marginal rates of substitution. Some examples of ordientable binary relations include the...

A mechanism implements a social choice correspondence f in mixed Nash equilibrium if, at any preference profile, the set of all (pure and mixed) Nash equilibrium outcomes coincides with the set of f-optimal alternatives for all cardinal representations of the preference profile. Unlike Maskinʼs...

This paper considers dynamic implementation problems with evolving private information (according to Markov processes). A social choice function is approximately implementable if there exists a dynamic mechanism such that the social choice function is implemented by an arbitrary large number of...