Research
Publications
(International Journal of Game Theory, 51, 53-85, (2022), DOI 10.1007/s00182-021-00785-x, Open Access)
We use epistemic game theory to explore rationales behind cooperative behaviors in the finitely repeated Prisoner's Dilemma. For a class of type structures that are sufficiently rich, the set of outcomes that can arise when each player i is rational and satisfies (m_i - 1)th order strong belief of rationality is the set of paths on which each player i defects in the last m_i rounds. We construct one sufficiently rich type structure to elaborate on how different patterns of cooperative behaviors arise under sufficiently weak epistemic conditions. In this type structure, the optimality of forgiving the opponent's past defection and the belief that one's defection will be forgiven account for the richness of the set of behavior outcomes.
(The B.E. Journal of Theoretical Economics, 2021, DOI 10.1515/bejte-2020-0089)
For a dynamic partnership with adverse selection and moral hazard, we design a direct profit division mechanism that satisfies epsilon-efficiency, periodic Bayesian incentive compatibility, interim individual rationality, and ex-post budget balance. In addition, we design a voting mechanism that implements the profit division rule associated with this direct mechanism in perfect Bayesian equilibrium. For establishing these possibility results, we assume that the partnership exhibits intertemporal complementarities instead of contemporaneous complementarities; equivalently, an agent’s current effort affects other agents’ future optimal efforts instead of current optimal efforts. This modeling assumption fits a wide range of economic settings.
Working Papers
We investigate how curbing patients' demands for unnecessary care affects the prevalence of overtreatment in healthcare. In our setting, minimizing overtreatment and maximizing patients' well-being requires that market demand for unnecessary care be strictly positive.
Service Fee and Overtreatment
We present a healthcare setting in which a lower service fee might mitigate or exacerbate overtreatment, depending on the initial service fee and the size of the fee reduction.
We show how epistemic theory can be used to study reputation effects in games. For each reputation-building behavior supported by an equilibrium with irrational types, we construct an epistemic representation that replicates the equilibrium beliefs and strategies. Although this epistemic representation does not satisfy strong belief of rationality, it can be extended to benefit epistemic analysis of rationality and m-th order strong belief of rationality. Conversely, we provide sufficient conditions under which a reputation-building behavior supported by an epistemic game can have its beliefs and strategies replicated by an equilibrium.
Work in Progress
Blockchain and Food Provenance (with Jeffrey Kline, Uwe Dulleck, and Valeri Natanelov)
How do Reputational Concerns Influence Doctors' Tendencies to Overtreat?
Optimal Capitation for Mitigating Overtreatment in Healthcare