We propose and axiomatize a decision model of social preferences under risk that captures motivated reasoning in social assessments. Our model considers a setup with a decision maker (DM) and one other individual. It highlights how the presence of risk enables the DM to egoistically exploit the...

Weinstein and Yildiz (Econometrica, 2007) have shown that only very weak predictions are robust to mispecifications of higher order beliefs. Whenever a type has multiple rationalizable actions, any of these actions is uniquely rationalizable for some arbitrarily close type. Hence, refinements of...

A key to the Coase conjecture is the monopolist's inability to commit to a price, which leads consumers to believe that a high current price will be followed by low future prices. This paper studies the robustness of the Coase conjecture with respect to these beliefs of consumers. In particular,...

We use an interactive epistemology framework to provide a systematic analysis of some solution concepts for games with asymmetric information. We characterize solution concepts using expressible epistemic assumptions, represented as events in the universal type space generated by primitive...

As auctions are becoming the main mechanism for selling advertisement space on the web, marketing agencies specialized in bidding in online auctions are proliferating. We analyze theoretically how bidding delegation to a common marketing agency can undermine both revenues and efficiency of the...