The aim of this report is to present a framework for analyses of governmental influence attempts using economic means, a phenomenon often referred to as geoeconomics. As the economies of the world have become more interconnected and new, often asymmetric, dependencies have emerged, the possibility of geoeconomic influence attempts has increased. Since this type of interactions is strategic in the sense that the ability of one state to accomplish its goals depends on the actions of other states and actors, we propose that the strategic choice approach is used for analysing geoeconomic influence attempts. In the report, we discuss how geoeconomics can be defined and how it can be operationalised using the strategic choice approach.

A product set of pure strategies is a Nash block if it contains all best replies to the Nash equilibria of the game in which the players are restricted to the strategies in the block. This defines an intermediate block property, between curb (Basu and Weibull, 1991) and coarse tenability (Myerson and Weibull, 2015). While the new concept is defined without reference to the consideration-set framework that defines tenability, the framework can be used to characterize Nash blocks in terms of potential conventions when large populations of individuals recurrently interact. Although weaker than curb, Nash blocks nevertheless maintain most robustness properties of curb sets.

A significant part of public spending is designated for investment projects within the public sector. Hence, it is crucial to properly prioritize the different projects. Cost calculations are an essential tool in the process of evaluating and prioritizing projects. This report describes and discusses systematic errors in cost estimations of public investment projects. 

First, the report starts with a description of the statistical method used to identify systematic errors in cost calculations. Second, a literature review shows that systematic cost underestimations that are both statistically and economically significant are common in a broad spectrum of investment projects. The last part of the report presents a method for adjusting cost calculation with data from previous projects in order to minimize the discrepancies. Finally, the report suggests that government authorities develop a database with previous projects in order to support their methods for cost calculations.

A new solution concept for finite games is presented and analyzed. It is defined in terms of outcomes—probability distributions over the plays of the game. Solid outcomes are robust to the representation of the game, whether in normal or extensive form, and are consistent with backward induction. They are also unaffected by the removal or addition of dominated strategies. Solid outcome sets exist in all finite extensive-form games with perfect recall. They have support in minimal “game blocks,” a class of product sets of pure-strategy profiles that are robust set-valued candidates for conventions and social norms in recurrent population play of the game. Algorithms for identifying all solid outcomes are presented, and simulations illustrate the solution concept's significant cutting power and computational efficiency.

Supplmentary materials

We analyze relationships between evolutionary stability and the tenable strategy blocks of Myerson and Weibull (Econometrica 83(3): 943–976). In finite two-player games, we prove that strategies robust against equilibrium entrants (Swinkels, J. Econ. Theory 57(2):306–332) are fully settled in the sense of Myerson and Weibull. Based on this, we propose new evolutionary stability concepts that characterize tenable strategy blocks directly. These characterizations are formulated solely in terms of primitives without relying on tenability’s meta game framework, simplifying the application of tenability and comparisons with other concepts. For instance, we prove that every coarsely tenable block contains a strategically stable set (Kohlberg and Mertens, Econometrica 54(5):1003–1037). Finally we show that in finite and symmetric two-player games, established evolutionary stability notions imply a symmetric variant of coarse tenability.

To study the behavior of individuals whose preferences change over time, I characterize expected utility preferences defined over infinite-horizon temporal lotteries. I provide utility representations for all such additively-separable preferences that are conditional on recent anticipations about future outcomes and satisfies a novel dynamically consistency axiom. The resulting representation can be interpreted as if the individual today selects her risk attitude for tomorrow’s outcome from a feasible set and then when tomorrow arrives takes this risk attitude as given. This representation is recursive, status quo biased and identifies the individual’s proneness to preference reversal. I present two applications of the model. In asset pricing, the model can account for a sizable equity premium together with low risk aversion and low aversion to temporal resolution of uncertainty. In life-cycle consumption, it can account for the empirical observation that consumption responds to small- and medium-sized income shocks with a lag, so-called excess sensitivity and smoothness of consumption.

This paper replaces the paper with title Optimized Reference-Dependent Preferences (April 2020)

When people interact in population settings, play may converge to subsets or points in the space of strategy profiles. This paper is an experimental investigation of the predictive power of point-valued and set-valued solution concept for finite normal-form games. We also explore the predictive power of learning models. The population setting that we consider is dynamic and allows individual players to change their strategy choices over time, in the light of observed aggregate population play in the past. The study utilizes an open-source, web-based platform called Gamelab software, developed by Eskil Forsell, Jörgen Weibull, and Kristaps Dzonsons (2016). Using the platform, we recruited over 200 subjects from, mainly, Toulouse School of Economics, Stockholm School of Economics, and from Amazon mTurk. The experimental data for this paper has been collected, and a preliminary analysis has been conducted.

This note establishes that if the face spanned by a strategy block in a finite normal-form game is asymptotically stable under any evolutionary selection dynamic in a wide class, then the block is a game block as defined by Ritzberger, Weibull, and Wikman (2025). That is, the block respects Nash equilibrium components and the index sum of the components with support in the block equals +1. The result extends Theorem 1 of Demichelis and Ritzberger (2003) from equilibrium components to faces of strategy blocks.

We consider the computational complexity of a number of problems relating to block-valued equilibrium concepts in bimatrix games. In particular, we consider (1) the problem of verifying whether a given block satisfies a given solution concept (2) the problem of verifying whether a given block is minimal under a given solution concept and (3) the problem of finding a single minimal block of a given solution concept in a game. Throughout, we discuss the relationship between the restrictions of each concept in both arbitrary and generic games.