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Two players simultaneously decide whether or not to acquire new weapons in an arms race game. Each player's type determines his propensity to arm. Types are private information, and are independently drawn from a continuous distribution. With probability close to one, the best outcome for each player is for neither to acquire new weapons (although each(More)
1 The paper studies the implementation problem, first analyzed by Maskin and Moore (1999), in which two agents observe an unverifiable state of nature and may renegotiate inefficient outcomes following play of the mechanism. We develop a first-order approach to characterizing the set of implementable utility mappings in this problem, paralleling Mirrlees's(More)
I present a strategic model of competition in price and availability in which demand is uncertain and consumers choose where to shop given firms' observable prices and their expectations of firms' unobservable inventories. In both a single period Cournot model (inventories are chosen first) and a single period Bertrand model (prices are chosen first) I show(More)
We build a game-theoretic model where aggression can be triggered by domestic political concerns as well as the fear of being attacked. In the model, leaders of full and limited democracies risk losing power if they do not stand up to threats from abroad. In addition, the leader of a fully democratic country loses the support of the median voter if he(More)
Dynamic consistency leads to Bayesian updating under expected utility. We ask what it implies for the updating of more general preferences. In this paper, we characterize dynamically consistent update rules for preference models satisfying ambiguity aversion. This characterization extends to regret-based models as well. As applications of our general(More)
odels of bilateral contracting, such as the canonical holdup model, typically assume that third parties are not available. Given this assumption, the equilibrium outcome is not first-best efficient if contracts can be renegotiated. To be more specific, suppose an architect and a builder must cooperate to build a building. The quality of the building will(More)