We present a theoretical and experimental study of three Cheap Talk games, each having two senders and one receiver. The communication of senders is simultaneous in the first game, sequential in the second game and determined by the receiver in the third game (the Choice Game). We find that the...

Recent experimental studies find excessive truth-telling and excessive trust in one sender/one receiver cheap talk games with an essentially unique and babbling equilibrium. We extend this setup by adding a second sender into the play and study the behavior of the players both theoretically and...

In this paper, we extend Aumann's (1974) well-known solution of correlated equilibrium to allow for a cost of disobedience for each player. Calling the new solution costly correlated equilibrium (CCE), we derive the necessary and sufficient conditions under which the set of CCE strictly expands...

This study analyzes a continuous-time N-agent Brownian hidden-action model with exponential utilities, in which agents' actions jointly determine the mean and the variance of the outcome process. In order to give a theoretical justi¯cation for the use of linear contracts, as in Holmstrom and...

Studies in family economics and anthropology suggest that grandmothers are a highly valuable source of childcare assistance. As such, the availability of grandmothers affects the cost of having children, and hence the fertility decisions of young parents. In this paper, we develop a simple model...

In this paper, we study price stickiness in a dual-channel supply chain where a single manufacturer sells its product through an online channel and a retailer. We construct a noncooperative game where the manufacturer and the retailer decide on whether or not to costlessly adjust their prices...

This paper unifies the theories of Nash implementation and Bayesian implementation in a single framework. Environments considered are such that each agent's characteristics include, in addition to a specification of his private information, a commonly known type parameter, while both attributes...

We examine the issue of learning in a generalized principal-agent model with incomplete information. We show that there are situations in which the agent prefers a Bayesian regulator to have more information about his private type. Moreover, the outcome of the Bayesian mechanism regulating the...

This paper shows that unregulated decentralized equilibrium is viable under increasing returns technologies in an overlapping generations model of production with cash-in-advance constraints. We also demonstrate that the model exhibits both the Tobin effect and the reverse Tobin effect.

In this paper, we model college admissions under early decision in a many-to-one matching framework with two periods. We show that there exists no stable matching system, involving an early decision matching rule and a regular decision matching rule, which is nonmanipulable via early decision...