We study bargaining over contingent contracts in problems where private information becomes public or verifiable when the time comes to implement agreement. suggest a simple, two-stage game that incorporates important aspects of bargaining. characterize equilibria which parties always reach agreement, and their limits as frictions vanish. Under mild regularity conditions, we show all interim-ef...

We examine methods for evaluating interventions designed to improve decision-making quality when people misunderstand the consequences of their choices. In an experiment involving financial education, conventional outcome metrics (financial literacy and directional behavioral responses) imply that two are equally beneficial even though only one reduces average severity errors. trace these failu...

Subjective beliefs are crucial for economic inference, yet behavior can challenge the elicitation. We propose that belief elicitation should be incentive compatible not only theoretically but also in a de facto behavioral sense. To demonstrate, we show binarized scoring rule, state-of-the-art elicitation, violates two weak conditions compatibility: (i) within information on incentives increases...

This paper uses laboratory experiments to directly test a central prediction of disclosure theory: that strategic forces can lead those who possess private information voluntarily provide it. In simple sender-receiver game, we find senders disclose favorable information, but withhold unfavorable information. The degree which is strongly related their stated beliefs about receiver actions, and a...

ABSTRACT We investigate the relationship between insider horizon and disclosure policy. First, we develop analyze a rational expectations model assuming insiders are able to commit Insiders with short prefer more willing bear costs of reduce information asymmetries among capital market participants. then empirically test our predictions in setting newly public firms where CEO is approaching ret...

We consider a linear stochastic univariate rational expectations model, with a predetermined variable, and provide alternative representations of SSEs (stationary sunspot equilibria). For a strict subset of the parameter space there exist SSEs that are locally stable under least squares learning provided agents use a common factor representation for their estimated law of motion. These results ...

This paper provides a learning justification for limited forecast equilibria, i.e., Ž . strategy profiles such that 1 players choose their actions in order to maximize the discounted average payoff over their horizon of foresight as given by their forecasts Ž . and 2 forecasts are correct on and off the equilibrium path. The limited forecast equilibria appear to be the stochastically stable out...

This paper studies disclosure dynamics and its implications for stock returns. Because disclosure is costly, the firm may withhold information for some time even when information is favorable. In equilibrium, the firm adopts a regular time-pattern of disclosure. Breaking this regularity, by failing to issue a disclosure when expected, leads to a sharp drop in the stock price and to a period of ...

We offer a model in which sequences of individuals often converge upon poor decisions and are prone to fads, despite communication of the payoff outcomes from past choices. This reflects both direct and indirect action-based information externalities. In contrast with previous cascades literature, cascades here are spontaneously dislodged and in general have a probability less than one of lasti...

The paper discusses the important role of clustering in the evolution of social networks, as it affects not only the incentives of players to cooperate but also their ability to search for fresh opportunities. Depending on the volatility of the environment and the social convention in place, we show that network clustering endogenously adapts to achieve and maintain, to the extent possible, a s...