We study the implications of flexible adjustment in strategic interactions using a class of finite-horizon models in continuous time. Players take costly actions to affect the evolution of state variables that are commonly observable and perturbed by Brownian noise. The values of these state...

We study the implications of flexible adjustment in strategic interactions using a class of finite-horizon models in continuous time. Players take costly actions to affect the evolution of state variables that are commonly observable and perturbed by Brownian noise. The values of these state...

Absent theoretical guidance, empiricists have been forced to rely upon numerical comparative statics from constant tax rate models in formulating testable implications of tradeoff theory in the context of natural experiments. We fill the theoretical void by solving in closed-form a dynamic...

We hypothesize that family firms’ dividend policies are in part determined by a consumption smoothing motive of family shareholders. Our paper tests this hypothesis using a Japanese dividend tax reform in 2011 which increased the dividend tax rate for only some groups of major family...

We investigate the effect of information lags in discrete time evolutionary game dynamics on symmetric games. At the end of each period, some players obtain information about the distribution of strategies among the entire population. They update their strategies according to this information....

We exhibit a natural environment, social learning among heterogeneous agents, where even slight misperceptions can have a large negative impact on long‐run learning outcomes. We consider a population of agents who obtain information about the state of the world both from initial private...

We propose nonparametric definitions of absolute and comparative naivete. These definitions leverage ex-ante choice of menu to identify predictions of future behavior and ex-post (random) choices from menus to identify actual behavior. The main advantage of our definitions is their independence...