We investigate the adverse selection problem where a principal delegates multiple tasks to individuals. The individuals form a group as a single agent and share their private signals in order to maximize their average payoff. We characterize the virtually implementable social choice functions by using the linking mechanism proposed by Jackson and Sonnenschein (2005) that restricts the message s...

This paper generalises the approach taken by Dasgupta & Maskin (1986) and Simon (1989) and provides necessary and su¢ cient conditions for the existence of pure and mixed strategy Nash equilibrium in games with continuous strategy spaces and discontinuous payo¤ functions. The conditions can be applied widely, and examples for existence of pure strategy and monotonic equilibria in First-Price au...

I discuss the merits and drawbacks of game theory in economics from the perspective of Austrian economics. I begin by arguing that Austrians have neglected game theory at their peril, and then suggest that game theoretic reasoning could be one way of modelling key Austrian insights. However, admittedly some aspects of game theory don’t square easily with Austrian economics. Moreover, a major st...

In this paper, we study cooperative games with coalition structures. We show that a solution concept which applies the Shapley value to games interand intra-coalitions and in which the pure surplus that the coalition obtains is allocated among the intra-coalition members in egalitarian way, is axiomatized by modified axioms on null players and symmetric players and the usual three axioms: Effic...

Wilson (1987) criticizes the existing literature of game theory as relying too much on common-knowledge assumptions. In reaction to Wilson’s critique, the recent literature of mechanism design has started employing simpler mechanisms such as dominant strategy mechanisms. However, there has been little theory behind this approach. In particular, it has not been made clear why, when a mechanism d...

s This paper reports laboratory experiments comparing arbitration behavior between and across two developed countries with extensive trade relations, the United States and Japan. Besides comparing domestic disputes in both locations, we evaluate disputes between the two countries. While we find nominal differences between the US and Japan, we observe significant changes in both cultures when fa...

A Vague Theory of Choice over Time We propose a novel approach to modelling time preferences, based on a cognitive shortcoming of human decision makers: the perception of future events becomes increasingly ‘blurred’ as the events are pushed further in time. We axiomatise a class of preference representations which can be specialised to rationalise ‘anomalies’ such as preference reversals and cy...

Recently, several game theorists have questioned whether information partitions are appropriate. Bacharach (2005) has considered in particular more general information patterns which may not even correspond to a knowledge operator. Such patterns arise when agents lack perfect discrimination, as in Luce’s (1956) example of intransitive indifference. Yet after extending the state space to include...

We propose a new mechanism to achieve coordination through voting, for which we discuss a number of real-life applications. Among them, the mechanism provides for a new theory for downsizing in organizations. A crisis may lead to a decrease in the willingness to cooperate in an organization, and therefore to a bad equilibrium. A consensual downsizing episode may signal credibly that survivors a...

This paper introduces a class of coalitional games, called pillage games, as a model of Hobbesian anarchy. Any coalition can pillage, costlessly and with certainty, any less powerful coalition. Power is endogenous, so a pillage game does not have a characteristic function, but pillage provides a domination concept that defines a stable set, which represents an endogenous balance of power. Every...