We show that the standard results for finitely repeated games do not survive the combination of two simple variations on the usual model. In particular, we add a small cost of changing actions and consider the effect of increasing the frequency of repetitions within a fixed period of time. We...

My own behavior baffles me. For I find myself not doing what I really want to do but doing what I really loathe." Saint Paul What behavior can be explained using the hypothesis that the agent faces temptation but is otherwise a standard rational agent"? In earlier work, GulPesendorfer [2001] use...

Tirole (1982) is commonly interpreted as proving that bubbles are impossible with finitely many rational traders with common priors. We study a simple variation of his model in which bubbles can occur, even though traders have common priors and even though it is common knowledge that the asset...

This paper studies the ability of interested parities to communicate private information credibly to a decision maker in settings where their payoffs depend on the decision maker's action, but not on their own information per se. Examples of such situations arise in advertising, corporate...

The purpose of this paper is to provided a simple model in which limited rationality endogenously generates incomplete contracts. I model limited rationality as in Lipman [1991,1992], focusing on the idea that boundedly rational agents do not necessarily know every implication of their...

This paper surveys some recent attempts to formulate a plausible and tractable model of bounded rationality. I focus in particular on models which view bounded rationality as stemming from limited information processing. I discuss computability, partitional models (such as automata, perceptrons,...

It has long been recognized that solving the logical omniscience problem requires using some kind of nonstandard possible worlds. While many such logics have been proposed, none has an obvious claim as the "right" logic to use to describe the reasoning of agents who are not logically omniscient....

wo most popular selling methods -- posted-price selling and auctions -- are compared in this paper. We confirm the common belief that auctions are most often used when the distribution of the object's value is widely dispersed. The choice of selling methods usually depends on the costs of...

This paper examines how a bidder can benefit from jump bidding by using the jump bid as a signal of a high valuation which causes other bidders to drop out of the auction earlier than they would otherwise. The information contained in a jump bid must be sufficient to induce a discrete change in...