This paper focuses on two areas of security concern for the European Union: terrorism and international crime. I present a model of game-theoretic interaction between a European state and a domestic dissident group, who, on occasion, may resort to acts of terrorism. Here, identity is crucial to...

We generalize permissibility (Brandenburger, 1992) to allow for any suitably defined model of preference and definition of possibility. We also prove that the generalized solution concept characterizes rationality, caution, and “common belief" of rationality and caution.

Monotone ratio orderings are refinements of first order stochastic dominance that allow monotone comparative statics results in games of incomplete information. We develop analogous refinements for second order stochastic dominance based on the monotonicity of the cumulative probability ratio...

This paper proposes nonparametric statistical procedures for analyzing discrete choice models of affective decision making. We make two contributions to the literature on behavioral economics. Namely, we propose a procedure for eliciting the existence of a Nash equilibrium in an intrapersonal,...

We suggest an operational definition of transaction cost as the expected value of strategy information in games played by individuals randomly matched from a large population. We relate the concept of a transaction cost minimum to those of Nash equilibrium, efficiency, and evolutionary...

This paper compares the properties of three electoral systems when voters have imperfect information. Imperfect information blurs voter decisions and may divorce the electoral outcome from the true preferences of the electorate. The challenge for electoral design is therefore to translate the...

We derive from Bernis [2000] a strategic mechanism which fully implements the set of competitive equilibria on a dynamically incomplete reinsurance market VIA Nash equilibria. The mechanism is feasible, and such that the set of coalition proof Nash equilibria coincides with that of Nash...

In this paper we show that a strict liability fine, established on the marginal damages caused by production act as a mean to discriminate between firms. More precisely, facing a potential risk, understood as a random negative externality, "ex ante" identical rival firms playing on a competitive...

This paper defines an equilibrium concept for general preferences in two person normal form games. It collapses to Nash Equilibrium when preferences are represented by the expected utility model. An important characteristic of the equilibrium concept is that player i does not necessarily know...

Behavior in competitive situations requires decision makers to evaluate their own as well as their competitors’ positions. Using data from a realistic competitive risk-taking setting, Jeopardy’s Tournament of Champions (TOC), we test whether players choose the strategic best response when...