A game is unprofitable if equilibrium payoffs do not exceed the maximin payoff for each player. In an unprofitable game, Nash equilibrium play has been notoriously difficult to justify. For some simple examples we analyze whether evolutionary and learning processes lead to Nash play

We discuss recent work on bounded rationality and learning in relation to Soros' principle of reflexivity and stress the empirical importance of non-rational, almost self-fulfilling equilibria in positive feedback systems. As an empirical example, we discuss a behavioral asset pricing model with...

Recent empirical evidence suggests that financial networks exhibit a core periphery network structure. This paper aims at giving an economic explanation for the emergence of such a structure using network formation theory. Focusing on intermediation benefits, we find that a core periphery...