We propose a macro-finance model in which inflation, growth, and the policy rate are driven by unobservable long-run trends and transitory cycles that investors must infer from aggregate data. Their subjective estimates of these trends, and the uncertainty surrounding them, are priced into the...

We study games with incomplete information and characterize when a feasible outcome is Pareto efficient. Outcomes with excessive randomization are inefficient: generically, the total number of action profiles across states must be strictly less than the sum of the number of players and the...

We study firms' financial and real decisions after an exogenous change in their interest rate beliefs induced by a survey experiment with an information treatment. Firms revise their expectations downward after learning about the European Central Bank's policy rate. Moreover, we find a reduction...

There has been significant recent progress in algorithms for approximation of Nash equilibrium in large two-player zero-sum imperfect-information games and exact computation of Nash equilibrium in multiplayer normal-form games. While counterfactual regret minimization and fictitious play are...

NATO enlargement and Russian annexation of Crimea marked crucial turning points. According to one narrative, the Russian occupation was part of a plan to re-establish dominion over Eastern Europe. According to a rival view, it was an attempt to counter a U.S. plan to subjugate Russia. I...

Policymakers often cite the risk that inflation expectations might "de-anchor" as a key reason for responding forcefully to inflationary shocks. We develop a model to analyze this trade-off and to quantify the benefits of stable long-run inflation expectations. In our framework, households and...

We study why inflation responds differently to economic activity over time. Using survey data covering the universe of Japanese firms, we show that firms are unable to perfectly distinguish aggregate from sector-specific demand changes, leading to positively correlated expectations about these...

This work highlights a previously overlooked factor that contributes to bias in private inflation forecasts-ignorance of confidential monetary rules. Additionally, it examines how this ignorance indirectly affects policy rate settings. The model proposed reconciles biases in two key forecast...

This paper explains brinkmanship with infinitely repeated veto bargaining games, where players have private information. In the basic model, the paper solves for two types of Perfect Bayesian Equilibria. First, in Risk-Taking Equilibria (RTE), the proposer is more risk-seeking and engages in...

We study the design of market information in competing-mechanism games. We identify a new dimension, private disclosures, whereby the principals asymmetrically inform the agents of how their mechanisms operate. We show that private disclosures have two important effects. First, they can raise a...

We consider a disclosure game between a seller and a buyer. The seller knows the quality of a good, while the buyer does not. Before the buyer decides how many units to purchase, the seller can disclose verifiable information about the good. The better the information, the more the buyer is...

We study flexible public information design in global games. In addition to receiving public information from the designer, agents are endowed with exogenous private information and must decide between two actions (invest and not invest), the profitability of which depends on unknown...

We study a duel game in which each player has incomplete knowledge of the game parameters. We present a simple, heuristically motivated and easily implemented algorithm by which, in the course of repeated plays, each player estimates the missing parameters and consequently learns his optimal...

We show that the discrete real option game model proposed in the recent literature can be extended to the case of imperfect information. As a result, the model can cover a wider range of applications. However, we also observe that the effectiveness of implementing the subsidy is affected by the...

How does information transmission change when it requires attracting the attention of receivers? This paper combines an experiment that varies freelance professionals’ incentives to attract attention about scientific findings, with several online experiments that exogenously expose receivers...

We test the predictions of the sticky information model using a survey dataset by comparing shoppers' accuracy in recalling the prices of regulated and comparable unregulated products. Because regulated product prices are capped, they are sold more than comparable unregulated products, while...

Using a novel and unique panel dataset of individual-level professional forecasts at short, medium, and very-long horizons, we provide new stylized facts about survey forecasts. We present direct evidence that forecasters use multivariate models in an environment with imperfect information about...

This paper studies repeated trade with noisy information about previous transactions. A buyer has private information about his willingness to pay, which is either low or high, and buys goods from different sellers over time. Each seller observes a noisy history of signals about the buyer's...