The mathematical framework of psychological game theory is useful for describing many forms motivation where preferences depend directly on one’s own or others’ beliefs. It allows incorporating, example, emotions, reciprocity, image concerns, and self-esteem in economic analysis. We explain how why, discussing basic theory, experiments, applied work, methodology. (JEL C70, D83, D91)

Crowdfunding, Cascades and Informed Investors Do higher proportions of (a) informed investors and (b) high-quality projects increase the number of good projects that are ultimately financed via crowdfunding? A simple model and simulation reveals the answers to both questions to be: ‘not necessarily’. JEL Classification: L26, C63, G23

A new algorithm is presented for computing Nash equilibria of ̄nite games. Using Kohlberg and Mertens' structure theorem we show that a homotopy method can be represented as a dynamical system and implemented by Smale's global Newton method. The algorithm is outlined and computational experience is reported. JEL Classi ̄cation C63.

We prove the generality of the methodology proposed in Benigno and Woodford (2006). We show that, even in the presence of a distorted steady state, it is always possible and relatively simple to obtain a purely quadratic approximation to the welfare measure. We also show that, in order to do so, the timeless perspective assumption is crucial. JEL classification: C61, C63

We are concerned with the problem of core membership testing for hedonic coalition formation games, which is to decide whether a certain coalition structure belongs to the core of a given game. We show that this problem is co-NP complete when players’preferences are additive. JEL Classi…cation : C71, C63.

We provide a computable algorithm to calculate uniform ε-optimal strategies in two-player zero-sum stochastic games. Our approach can be used to construct algorithms that calculate uniform ε-equilibria and uniform correlated ε-equilibria in various classes of multi-player non-zero-sum stochastic games. JEL codes: C63, C73.

This paper extends Carroll’s (2006) endogenous grid method and its combination with value function iteration by Barillas and Fernández-Villaverde (2007) to nonconcave problems. The method is illustrated using a consumer problem in which consumers choose both durable and non-durable consumption. The durable choice is discrete and subject to non-convex adjustment costs. The algorithm yields subst...

We consider a Cournot oligopoly setting in which consumers have an intrinsic preference for variety, while unit production costs of firms increase with the number of goods they produce. This environment exhibits a general under-provision of variety with respect to social welfare. JEL Classification Numbers: C70, L13, L20

This paper proposes the solution concept of interim correlated rationalizability, and shows that all types that have the same hierarchies of beliefs have the same set of interim correlated rationalizable outcomes. This solution concept characterizes common certainty of rationality in the universal type space. JEL Classi…cation and keywords: C70, C72, rationalizability, incomplete information, c...

This paper highlights connections between the discrete and continuous approaches to optimal auction design with single and multi-dimensional types. We provide an interpretaion of an optimal auction design problem in terms of a linear program that is an instance of a parametric shortest path problem on a lattice. We also solve some cases explicitly in the discrete framework. JEL Classification: ...