This paper shows that the presence of different types of players - those who only care about their own material payoffs and those who reciprocate others' contributions - can explain the robust features of observed contribution patterns in public good contribution games, even without the presence of asymmetric information. We show what conditions on reciprocity are sufficient for a unique perfect equilibrium, in which contributions are decreasing. Under these conditions, selfish players have enough future benefits to induce subsequent contributions by reciprocal players, and this incentive diminishes as the end of the game approaches. The model explains the puzzling restart effect and is consistent with various other empirical findings. We also report the results of a series of experiments, using a probabilistic continuation design in which after each set of 10-period games, the group is restarted with low probability. We find specic support for the theory in our data, including that selfish players (identied exogenously) stop contributing earlier than reciprocal players, as directly implied by the model.

Existing theoretical and empirical research on dowries has difficulty accounting for the large changes in dowry levels observed in many countries over the past few decades. To explain trends in dowry levels in Bangladesh, we draw attention to an institutional feature of marriage contracts previously ignored in the literature: the mehr or traditional Islamic brideprice, which functions as a prenuptial agreement in Bangladesh due to the default practice of being only payable upon divorce. We develop a model of marriage contracts in which mehr serves as a barrier to husbands exiting marriage and a component of dowry is an amount that ex ante compensates the groom for the cost of mehr. The contracts are welfare-improving because they induce husbands to internalize the social costs of divorce for women. We investigate how mehr and dowry respond to exogenous changes in the costs of polygamy and divorce, and show that our model gives a different set of predictions than traditional models of dowry payments without contractible mehr. To test the model’s predictions empirically, we use data collected on marriage contracts between 1956 and 2004 from a large household survey from the Northwest region of the country, and make use of key changes in Muslim Family Law in 1961 and 1974. We show that major changes in dowry levels took place precisely after the legal changes, corresponding to simultaneous changes in levels of mehr.

This paper investigates firms’ pricing decisions and consumers’ network choices in two-sided markets with network externalities. Consumers are heterogeneous in how much they value the externality. We show that imposing some restrictions on the extent of coordination failure among consumers leads to clear qualitative conclusions about equilibrium market configurations. Multiple asymmetric networks can coexist in equilibrium, both in the case of a monopolist network provider and in the case of competing providers. These equilibria have the property that can be observed in many different two-sided markets: one network is cheaper and larger on one side, while the other network is cheaper and larger on the other side. Product differentiation is endogenized by consumers’ network choices.

This paper generalizes the concept of best response to coalitions of players and offers epistemic definitions of coalitional rationalizability in normal form games. The (best) response of a coalition is defined to be an operator from sets of conjectures to sets of strategies. A strategy is epistemic coalitionally rationalizable if it is consistent with rationality and common certainty that every coalition is rational. A characterization of this solution set is provided for operators satisfying four basic properties. Special attention is devoted to an operator that leads to a solution concept that is generically equivalent to the iteratively defined concept of coalitional rationalizability.

Dispersion in retail prices of identical goods is inconsistent with the standard model of price competition among identical firms, which predicts that all prices will be driven down to cost. One common explanation for such dispersion is the use of a loss-leader strategy, in which a firm prices one good below cost in order to attract a higher customer volume for profitable goods. By assuming each consumer is forced to buy all desired goods at a single firm, we create the possibility of an effective loss-leader strategy. We find that such a strategy cannot occur in equilibrium if individual demands are inelastic, or if demands are diversely distributed. We further show that equilibrium loss-leaders can occur (and can result in positive profits) if there are demand complementarities, but only with delicate relationships among the preferences of all consumers.

This paper provides empirical evidence of the influence of adolescent marriage opportunities on female schooling attainment and gives predictions of the impact for imposing universal age-of-consent laws. Using data from rural Bangladesh, we explore the commonly cited hypotheses that women attain less schooling as a result of social and financial pressure to marry young. We isolate the causal effect of marriage timing by exploiting variation in the timing of menarche as an instrumental variable for age of first marriage. Our results indicate that marriage age matters: Each additional year that marriage is delayed is associated with 0.22 additional years of schooling attainment and 5.6% higher probability of literacy. Delayed marriage is also associated with a significant increase in use of preventive health care services, some of which appears to be independent of the change in schooling, indicating separate “age effects” of delaying marriage. In the context of competitive marriage markets we show that the above results can be used to obtain estimates of the change in equilibrium female education that would arise from introducing a minimum legal age of marriage. The resulting analysis implies that, under reasonable assumptions, enforcing universal age of consent laws would have a strong positive impact on female schooling.

This paper analyzes multi-sender cheap talk when the state space might be restricted, either because the policy space is restricted, or the set of rationalizable policies of the receiver is not the whole space. We provide a necessary and sufficient condition for the existence of a fully revealing perfect Bayesian equilibrium for any state space. We show that if biases are large enough and are not of similar directions, where the notion of similarity depends on the shape of the state space, then there is no fully revealing perfect Bayesian equilibrium. The results suggest that boundedness, as opposed to dimensionality, of the state space plays an important role in determining the qualitative implications of a cheap talk model. We also investigate equilibria that satisfy a robustness property, diagonal continuity.

This paper investigates how groups or coalitions of players can act in their collective interest in non-cooperative normal form games even if equilibrium play is not assumed. The main idea is that each member of a coalition will confine play to a subset of their strategies if it is in their mutual interest to do so. An iterative procedure of restrictions is used to define a non-cooperative solution concept, the set of coalitionally rationalizable strategies. The procedure is analogous to iterative deletion of never best response strategies, but operates on implicit agreements by different coalitions. The solution set is a nonempty subset of the rationalizable strategies.