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2. page 20 (added 10/24/08): Each t +1 in the second and third last lines should be t. (There are three occurences.) 3. page 27 (added 10/4/06): In the 2nd and 3rd line, the superscript T − 1 ofâ should be T − 2 in the first terms of the right hand side. 4. page 29 (added 1/9/07): Add " (where h t = (a 0 ,. .. , a t−1) and h t−1 = (a 0 ,. .. , a t−2)) "(More)
ous seminar audiences and Drew Fudenberg and three anonymous referees for helpful comments. Dekel and Rustichini thank the NSF and Lipman thanks SSHRCC for financial support for this research. Lipman also thanks Northwestern and Carnegie Mellon for their hospitality while this work was in progress. This paper was previously titled " A Unique Subjective(More)
In repeated games with imperfect public monitoring, players can use public signals to coordinate their behavior, and thus support cooperative outcomes, but with private monitoring, such coordination may no longer be possible. Even though grim trigger is a perfect public equilibrium (PPE) in games with public monitoring, it often fails to be an equilibrium(More)
We study the long-run sustainability of reputations in games with imperfect public monitoring. It is impossible to maintain a permanent reputation for playing a strategy that does not eventually play an equilibrium of the game without uncertainty about types. Thus, a player cannot indefinitely sustain a reputation for non-credible behavior in the presence(More)
Do investors making complementary investments face the correct incentives, especially when they cannot contract with each other prior to their decisions? We present a two-sided matching model in which buyers and sellers make investments prior to matching. Once matched, buyer and seller bargain over the price, taking into account outside options. Efficient(More)
This paper investigates a new class of 2-player games in continuous time, in which the players' observations of each other's actions are distorted by Brownian motions. These games are analogous to repeated games with imperfect monitoring in which the players take actions frequently. Using a differential equation we find the set E(r) of payoff pairs(More)
This article develops a simple model that captures a concern for relative standing, or status. This concern is instrumental in the sense that individuals do not get utility directly from their relative standing, but, rather, the concern is induced because their relative standing affects their consumption of standard commodities. The article investigates the(More)
This paper provides an analog to the aggregate monotonicity condition introduced by Samuelson and Zhang [J. .&on. Theory, 19921 in a study of continuous dynamics. Our condition guarantees that limit points of discrete selection dynamics are rationalizable strategies. We show that the condition will be satisfied by the discrete replicator dynamic if the(More)
We provide several generalizations of Mailath's (1987) result that in games of asymmetric information with a continuum of types incentive compatibility plus separation implies differentiability of the informed agent's strategy. The new results extend the theory to classic models in finance such as Leland and Pyle (1977), Glosten (1989), and DeMarzo and(More)