Creditors of a distressed borrower face a coordination problem. Even if the fundamentals are sound, fear of premature foreclosure by others may lead to pre-emptive action, undermining the project. Recognition of this problem lies behind corporate bankruptcy provisions across the world, and it...

In a financial market where traders are risk averse and short lived, and prices are noisy, asset prices today depend on the average expectation today of tomorrow's price. Thus (iterating this relationship) the date 1 price equals the date 1 average expectation of the date 2 average expectation...

We present a finite period general equilibrium model of an exchange economy with asymmetric information. We say that a rational expectations equilibrium exhibits an expected bubble if the price of an asset in one period is higher than any agent's marginal valuation of holding the asset to...

We analyze the problem of fully implementing a social choice set in ex post equilibrium. We identify an ex post monotonicity condition that is necessary and--in economic environments--sufficient for full implementation in ex post equilibrium. We also identify an ex post monotonicity no veto...

We discuss four solution concepts for games with incomplete information. We show how each solution concept can be viewed as encoding informational robustness. For a given type space, we consider expansions of the type space that provide players with additional signals. We distinguish between...

A game of incomplete information can be decomposed into a basic game and an information structure. The basic game defines the set of actions, the set of payoff states the payoff functions and the common prior over the payoff states. The information structure refers to the signals that the...

We analyze the welfare consequences of a monopolist having additional information about consumers' tastes, beyond the prior distribution; the additional information can be used to charge different prices to different segments of the market, i.e., carry out "third degree price discrimination." We...

We analyze the welfare consequences of a monopolist having additional information about consumers' tastes, beyond the prior distribution; the additional information can be used to charge different prices to different segments of the market, i.e., carry out "third degree price discrimination." We...

We consider the efficient allocation of a single good with interdependent values in a quasi-linear environment. We present an approach to modeling interdependent preferences distinguishing between "payoff types" and "belief types" and report a characterization of when the efficient allocation...

The set of outcomes that can arise in Bayes Nash equilibria of an incomplete information game where players may or may not have access to more private information is characterized and shown to be equivalent to the set of an incomplete information version of correlated equilibrium, which we call...