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Within the expected-utility framework, the only explanation for risk aversion is that the utility function for wealth is concave: A person has lower marginal utility for additional wealth when she is wealthy than when she is poor. This paper provides a theorem showing that expected-utility theory is an utterly implausible explanation for appreciable risk(More)
Empirical studies in economics and behav-ioral ecology suggest that, ceteris paribus, animals and humans appear to place less weight on the future than on the present, i.e., they act as though they discount future payoffs. Furthermore (and more interestingly), they do so with discount rates that increase as the time before those payoffs are realized grows(More)
This paper o®ers a new equilibrium concept for ¯nite normal form games motivated by the idea that players may have preferences which display uncertainty aversion. More speci¯cally, it adopts the representation of preferences presented in Gilboa and Schmeidler (1989). Then an equilibrium with uncertainty aversion is de¯ned and applied to a number of simple(More)
The reputation literature, following Fudenberg and Levine (1989)'s seminal paper , often considers a perturbation of a repeated game in which player one may, with small probability, be a " commitment " type that always plays a " commitment " strategy. Reputation results, in which player one obtains the same payoff as if she could commit publicly to that(More)
We consider an implementation problem faced by a planner who manages a roadway network. The problem entails both hidden information and hidden actions. We solve the planner's problem by introducing a new class of mechanisms and a new notion of implementation. The mechanisms, called price schemes, attach transfers to the available routes; they do not involve(More)
A long-standing conjecture is that winner-take-all games such as patent races lead to the survival of risk-takers and the extinction of risk-averters. In many species a winner-take-all game determines the males' right to reproduce, and the same argument suggests that males will evolve to be risk-takers. Psychological and sociological evidence buttresses the(More)
We generalize the canonical problem of Nash implementation by allowing agents to voluntarily provide discriminatory signals, i.e. evidence. Evidence can either take the form of hard information or, more generally, have differential but non-prohibitive costs in different states. In such environments, social choice functions that are not Maskin-monotonic can(More)
This paper shows that in situations in which the preferences of multiple selves are aggregated into a collective decision, even if the researcher has a fully specified theory of how preferences get aggregated, there are typically no testable implications of the theory unless there is an a priori restriction on the number of selves. This result has(More)