One of the most widely accepted explanations for why wars occur despite its Pareto-suboptimality is mutual optimism: if both sides expect to gain a lot by fighting, war becomes inevitable. The literature on mutual optimism typically assumes mutually optimistic beliefs and shows that, under such...

We propose a belief-based theory for private information games. A Bk player forms correct beliefs up to the k^th-order, and heuristic beliefs from the (k +1)^th-order onwards. Correct beliefs follow the prior distribution of types, as in standard game theory. Heuristic beliefs ignore the...

We analyse a standard pivotal-voter model under majority rule, with two rival groups of players, each preferring one of two public policies and simultaneously deciding whether to cast a costly vote, as in Palfrey and Rosenthal (1983). We allow the benefit of the favorite public policy to...

In this note, we characterize the equilibria of the standard pivotal-voter participation game between two groups of voters of asymmetric sizes, as originally proposed by Palfrey and Rosenthal [1983. A strategic calculus of voting. Public Choice. 41, 7-53]

We study all-pay auctions with private and affiliated binary values. To increase revenue (i.e., expected aggregate bid), the auction organizer can commit ex ante to fully disclosing or concealing bidders’ valuations. We find that full disclosure, as opposed to full concealment, always...

We study the voluntary provision of a discrete public good via the contribution game. Players independently and simultaneously make nonrefundable contributions to fund a discrete public good, which is provided if and only if the contributions are at least as great as the cost of production. We...