We consider two partition models to be compatible if they render the same set of hierarchies of beliefs over a given set of underlying uncertainties. A model is reduced if only one partition element corresponds to each hierarchy. We show how to generate all models in a compatible class from the reduced model by introducing a state-dependent correlating mechanism which reveals different informat...

January 2002 (First version: November 1998) Many strategic interactions in the real world take place among delegates empowered to act on behalf of others. Although there may be a multitude of reasons why delegation arises in reality, one intriguing possibility is that it yields a strategic advantage to the delegating party. In the case where only one party has the option to delegate, we analyze...

We ask whether the absence of information about other voters’ preferences allows optimal voting to be interpreted as sincere. We start by classifying voting mechanisms as simple and complex according to the number of message types voters can use to elect alternatives. We show that while the elimination of information about other voters’ preferences allows optimal voting to be interpreted as sin...

Strategies of Cooperation and Punishment among Students and Clerical Workers We study the individual behavior of students and workers in an experiment where they repeatedly face the same cooperative task. The data show that clerical workers differ from college students in overall cooperation rates, strategy adoption and use of punishment opportunities. Students cooperate more than workers. Coop...

This paper explores the way in which society in general and economists in particular deal with fundamental uncertainty. It is argued that uncertainty is interdependent with the evolution of institutions and behavior, including that designed to help society cope with uncertainty. While some mainstream theory does address uncertainty, it employs a much narrower concept than fundamental uncertaint...

Information disclosure regulations are increasingly common, but their effects on the behavior of regulated firms are unclear. The 1996 Amendments to the Safe Drinking Water Act mandated that community drinking water suppliers issue to customers annual consumer confidence reports (CCRs), containing information on violations of drinking water regulations and on observed contaminant levels. We exa...

This paper introduces a psychological notion of categorization into economics and derives its implications for economic decision making. We show, using a tractable model of social cognition, that a decision maker in (eÆciently) assigning past experiences to categories, will sort experiences of interaction with larger (majority) groups more nely than experiences with smaller (minority) groups. W...

This paper explores interactive epistemology within Morris’ [S. Morris, Alternative definitions of knowledge, in: M.O.L. Bacharach, L.-A. Gerard-Varet, P. Mongin, H.S. Shin (Eds.), Epistemic Logic and the Theory of Games and Decisions, Kluwer Academic Publishers, Amsterdam, 1997, pp. 217–233] framework of knowledge. Specifically, this paper proves a generalized “agreeing to disagree” result. Th...

Gender Differences in Risk Aversion and Ambiguity Aversion This paper demonstrates gender differences in risk aversion and ambiguity aversion. It also contributes to a growing literature relating economic preference parameters to psychological measures by asking whether variations in preference parameters among persons, and in particular across genders, can be accounted for by differences in pe...

This paper offers a continuous time, general equilibrium model where a risky asset is traded among risk-averse overconfident investors. Two kinds of overconfidence are introduced: investors exhibit relative overconfidence if each investor believes her model is better than others’ and aggregate overconfidence if they believe signals have more information content than those in the true model. Rel...