We report on an experiment in which subjects choose actions in strategic games with either strategic complements or substitutes against a granny, a game theorist or other subjects. The games are selected in order to test predictions on the comparative statics of equilibrium with respect to...

This paper studies individuals' preference for reducing advantageous inequality in the distribution of gains and losses. Combining the inequality aversion model of Fehr and Schmidt (1999) with loss aversion à la Kahneman and Tversky (1979), we predict the relative dislike for advantageous...

This paper looks at a general framework for mean-field games with ambiguity averse players based on the probabilistic framework described in Carmona (2013). A framework for mean-field games with ambiguity averse players is presented, using a version of the stochastic maximum principle to find...

Random choice as the outcome of deliberate randomization has been extensively documented in the recent experimental economics literature.Motivated by this evidence, we consider a decision-maker (DM) who faces a set of risky actions and can delegate his choice to a randomization device. We assume...

This paper develops a methodology for characterizing expected revenue from auctions when bidders' types come from an arbitrary distribution. In particular, types may be multidimensional, and there may be mass points in the distribution. One application extends existing revenue equivalence...

We analyze the problem of dividing a fixed amount of a single commodity between two players on the basis of the Nash Bargaining Solution (NBS). For one-shot negotiations, a cornerstone result of Roth (1989) establishes that the more risk averse player will obtain less than half the total amount....

Prior literature suggests that the zero-earnings discontinuity is caused by earnings management. This makes sense if investors are naíve. We test for the possibility of investor naíveté and find that they are aware of firms performing earnings management around zero reported earnings and that...

In this study, we present a behavioral definition of betrayal aversion with sources of uncertainty and develop a framework for various trust games, including context dependence, communication, and pressure. In our framework, attitudes toward betrayal aversion depend on the perception of...

We apply the aggregation property of Identical Shape Harmonic Absolute Risk Aversion (ISHARA) utility functions to analyze the comparative statics properties of a bargaining model with uncertainty. We identify sufficient and necessary conditions under which an increase in one's degree of risk...

I study the canonical private value auction model for a single good without the quasilinearity restriction. I assume only that bidders are risk averse and the indi- visible good for sale is a normal good. I show that removing quasilinearity leads to qualitatively different solutions to the...