Every abstract type of a belief-closed type space corresponds to an infinite belief hierarchy. But only finite order of beliefs is necessary for most applications. As we demonstrate, many important insights from recent development in the theory of Bayesian games with higher-order uncertainty...

This paper considers a model of endogenous bilateral cross-holdings. A notion of pairwise stability is applied to analyze firms' incentives for cross-holdings. Under certain conditions and Cournot competition on the output market, it is shown that monopoly is the only outcome of pairwise stable...

Several articles claim that Eichenbaum and Evans (1995) shows that nominal exchange rates experience a delayed version of Dornbusch overshooting. These same articles usually claim that impulse responses similar to those in Eichenbaum and Evans are evidence of such overshooting. But Eichenbaum...