Decision Making & Negotiations

Infinitely repeated games is the pre-dominant paradigm within which economists study long-term strategic interaction. The standard framework allows players to condition their strategies on all past actions; that is, assumes that they have unbounded memory. That is clearly a convenient simplification that is at odds with reality. In this paper we restrict attention to one-period memory and characterize all totally mixed equilibria. In particular, we focus on strongly mixed equilibria. We provide conditions that are necessary and sufficient for a game to have such an equilibrium.

We develop a model of hedge fund returns, which reflect the contractual relationships between a hedge fund, its investors and its prime brokers. These relationships are modeled as short option positions held by the hedge fund, wherein the "funding option" reflects the short option position with prime brokers and the "redemption option" reflects the short option position with the investors. Given an alpha producing human capital, the hedge fund's ability to deploy leverage is shown to be sharply constrained by the presence of these short options.

In The Art of Choosing, Columbia Business School professor Sheena Iyengar, a leading expert on choice, sets herself the Herculean task of helping us become better choosers. She asks fascinating questions: Is the desire for choice innate or created by culture? Why do we sometimes choose against our best interests? How much control do we really have over what we choose? Ultimately, she offers unexpected and profound answers, drawn from her award-winning, discipline-spanning research.

Because of its evolutionary roots, the affective system of evaluation is inherently more ordinal in its architecture than the cognitive system. That is, the affective system focuses more on the relative ranking of target objects on the evaluative dimension than on their absolute values on the same dimension.

In this paper, we postulate a general class of price competition models with Mixed Multi Nomial Logit demand functions under affine cost functions. We characterize the equilibrium behavior of this class of models starting with the case where each product in the market is sold by a separate, independent firm. Here we identify a natural upper bound for the price levels.

Organized groups face a fundamental problem of how to distribute resources fairly. We found people view it as less fair to distribute resources equally when the allocated resource invokes the market by being a medium of exchange than when the allocated resource is a good that holds value in use. These differences in fairness can be attributed to being a medium of exchange, and not to other essential properties of money (i.e., being a unit of account or a store of value).

After decades of research highlighting the fallibility of first impressions, recent years have featured reports of valid impressions based on surprisingly limited information, such as photos and short videos. Yet beneath mean levels of accuracy lies tremendous variance—some snap judgments are well-founded, others wrongheaded. An essential question for perceivers, therefore, is whether and when to trust their initial intuitions about others.

Timely access to care is a key component of high quality health care. Yet, patient delays are prevalent throughout the health-care system resulting in dissatisfaction and adverse clinical consequences for patients as well as potentially higher costs and wasted capacity for providers. For this reason, the Institute of Medicine has identified "timeliness" as one of the six keys in "aims for improvement" in its health-care quality initiative.