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Under the assumption that individuals know the conditional distributions of signals given the payoff-relevant parameters, existing results conclude that as individuals observe infinitely many signals, their beliefs about the parameters will eventually merge. We first show that these results are fragile when individuals are uncertain about the signal(More)
Most economic analyses presume that there are limited differences in the prior beliefs of individuals, an assumption most often justified by the argument that sufficient common experiences and observations will eliminate disagreements. We investigate this claim using a simple model of Bayesian learning. Two individuals with different priors observe the same(More)
  • Daron Acemoglu Mit, Michael Golosov, Mit Aleh, Tsyvinski Harvard, Manuel Amador, Marios Angeletos +20 others
  • 2006
We study the optimal Mirrlees taxation problem in a dynamic economy with idiosyncratic (productivity or preference) shocks. In contrast to the standard approach, which implicitly assumes that the mechanism is operated by a benevolent planner with full commitment power, we assume that any centralized mechanism can only be operated by a self-interested(More)
The MIT Faculty has made this article openly available. Please share how this access benefits you. Your story matters. Abstract. We consider " nice " games (where action spaces are compact intervals , utilities continuous and strictly concave in own action), which are used frequently in classical economic models. Without making any " richness " assumption ,(More)
Which social norms and networks maximize cooperation in bilateral relationships? We study a network of players in which each link is a repeated bilateral partnership with two-sided moral hazard. e obstacle to community enforcement is that each player observes the behavior of her partners in the partnerships with her, but not how they behave in other(More)
Present economic theories make a common-knowledge assumption that implies that the first or the second-order beliefs determine all higher-order beliefs. We analyze the role of such closing assumptions at finite orders by instead allowing higher orders to vary arbitrarily. Assuming that the space of underlying uncertainty is sufficiently rich, we show that(More)
This paper introduces a method to compare direct mechanisms based on their vulnerability to manipulation or deviation from truthful reporting. We explore the following idea: if a player can manipulate mechanism ψ whenever some player can manipulate mechanism ϕ, then ψ is more manipulable than ϕ. Our notion generates a partial ordering on mechanisms based on(More)
An agent with a misperception may have an evolutionary advantage when his misperception and its behavioral implications are recognized by others. In such situations evolutionary forces can lead to misperceptions, yielding " irrational behavior , " such as the play of strictly dominated strategies. We point out that this reasoning relies on the assumption of(More)
Under a firm deadline, agreement in bargaining is often delayed until the deadline. I propose a rationale for this deadline effect that naturally comes from the parties' optimism about their bargaining power. I then show that the deadline effect disappears if the deadline is stochastic and the offers are made arbitrarily frequently.