We prove the existence of a private value allocation for an economy with differential information where the commodity space may be infinite dimensional, and there is a continuum of states. We also discuss the existence, non-existence, and properties of two alternative value allocation concepts. JEL classification: D8; D82; C7; C71; C72

In a model where cooperation is beneficial, but subject to cheating, and is supported by trigger strategy punishments in a repeated game, we explore the relationship between the nature of cooperation (size and composition of coalitions) and underlying inequality in the distribution of private productive assets. JEL Codes: C72, D30, D70, O10, P0

We examine a simple economic model of network formation where agents benefit from indirect relationships. We show that small-world features—short path lengths between nodes together with highly clustered link structures—necessarily emerge for a wide set of parameters. (JEL: D85, A14, C72)

A game with a continuum of players is described by a function assigning payoff functions to players and satisfying some measurability properties. In this note we establish the equivalence between several measurability assumptions that have been made in the literature. Journal of Economic Literature Classification Numbers: C72.

In this paper we study the mechanics of “leading by example” in teams. Leadership is beneficial for the entire team when agents are conformists, i.e., dislike effort differentials. We also show how leadership can arise endogenously and discuss what type of leader benefits a team most. JEL codes: C72; D23; D63; J31; L23.

We compare the behavior of car mechanics and college students as sellers in experimental credence goods markets. Finding largely similar behavior, we note much more overtreatment by car mechanics, probably due to decision heuristics they learned in their professional training. JEL classifications: C91, D82, C72

We show that the Folk Theorem holds for n-player discounted repeated game with bounded-memory pure strategies. Our result requires each player’s payoff to be strictly above the pure minmax payoff but requires neither time-dependent strategies, nor public randomization, nor communication. The type of strategies we employ to establish our result turn out to have new features that may be important...

We investigate whether or not ex post destruction can solve the hold-up problem. After clarifying the difference between ex post destruction and nontrade when negotiation breaks down, we show that the option of ex post destruction is not sufficient to enhance ex ante efficiency. In particular, only if the information about the spitefulness of the supplier is coarse enough, will the option of ex...

The projection dynamic is an evolutionary dynamic for population games. It is derived from a model of individual choice in which agents abandon their current strategies at rates inversely proportional to the strategies’ current levels of use. The dynamic admits a simple geometric definition, its rest points coincide with the Nash equilibria of the underlying game, and it converges globally to N...

Then, the limit points of the sequence of plays are correlated equilibria. In fact, for each correlated equilibrium there is some calibrated learning rule that the players can use which results in their playing this correlated equilibrium in the limit. Thus, the statistical concept of a calibration is strongly related to the game theoretic concept of correlated equilibrium. Journal of Economic ...