This paper extends the job market signaling model of Spence (1973) by allowing firms to learn the ability of their employees over time. Contrary to the model without employer learning, we find that the Intuitive Criterion does not always select a unique separating equilibrium. When the Intuitive...

The traditional model of sequential decision making, for instance, in extensive form games, is a tree. Most texts de?ne a tree as a connected directed graph without loops and a distinguished node, called the root. But an abstract graph is not a domain for decision theory. Decision theory...

When the strategy set of a game is a continuum, its discretization may not conserve local properties even for arbitrarily fine strategy grids. This paper provides two technical lemmata which are useful to deal with these problems in particular contexts. Four applications are presented, regarding...

We study competition among market designers who create new trading platforms, when boundedly rational traders learn to select among them. We ask whether 'Walrasian' platforms, leading to market-clearing trading outcomes, will dominate the market in the long run. If several market designers...

This paper analyzes a learning model where sophisticated market designers create new trading platforms and boundedly rational traders select among them. We ask wether "Walrasian'''' platforms, leading to efficient (market - clearing) trading outcomes, will dominate the market in the long run. If...

Many models postulate a continuum of agents of finitely many different types who are repeatedly randomly matched in pairs to perform certain activities (e.g. play a game) which may in turn make their types change. The random matching process is usually left unspecified, and some Law of Large...

In a (generalized) symmetric aggregative game, payoffs depend only on individual strategy and an aggregate of all strategies. Players behaving as if they were negligible would optimize taking the aggregate as given. We provide evolutionary and dynamic foundations for such behavior when the game...

This paper analyzes the question whether traders learn to coordinate on a trading institution that guarantees market clearing, or whether other market institutions can survive in the long run. While we find that the market clearing institution is indeed always stable under a general class of...

This paper considers bounded-memory players in a coordination game, who imitate the most successful remembered actions. With exogenous inertia, risk-dominant equilibria are selected independently of the length of memory. Without inertia, Pareto-dominant equilibria arise when memory is long enough.

A strategy profile of a game is called robustly stochastically stable if it is stochastically stable for a given behavioral model independently of the specification of revision opportunities and tie-breaking assumptions in the dynamics. We provide a simple radius-coradius result for robust...