Players choose a stochastic choice rule, assigning a probability of “investing” as a function of a state. Players receive a return to investment that is increasing in the proportion of others who invest and the state. In addition, they incur a small cost associated with adapting the...

We study flexible information acquisition in a coordination game. "Flexible" acquisition means that players choose not only how much but also what kind of information to acquire. Information acquisition has a cost proportional to reduction of entropy. Hence, players will collect the information...

We study information acquisition in a coordination game with incomplete information. To capture the idea that players can flexibly decide what information to acquire, we do not impose any physical restriction on feasible information structure. Facing an informational cost measured by reduction...

We study liquidity provision by dealers in a dynamic model of asset markets. When economic fundamentals are high (low), dealers provide more (less) liquidity by holding more (less) inventory, the market is liquid (illiquid), and interdealer trading is active (inactive). When fundamentals are...