Turnbull (Econ Lett 13: 253–258, 1983) describes unique symmetric Nash equilibria for supply function competition under demand uncertainty which consist of affine strategies that are nonlinear. For the same economy Klemperer and Meyer (Econometrica 79: 1919–1966, 1989) derive unique Nash equilibria that are linear. This note shows that the friction between both results comes from a mathematical error in Turnbull (Econ Lett 13: 253–258, 1983). Correcting this error establishes the same linear Nash equilibria for both models.
Whether taking an optional pass-fail test is optimal depends on pass probabilities, which increase in productivity and are each individual's private information, and on the wages earned when passing or failing the test, which are conditional expectations formed about productivity by employers who know its distribution in the population subset that chooses to take the test. This paper models the relevant rational-expectations equilibrium and shows that plausible pass-probability functions imply that as a difficult test becomes more difficult, taking it becomes more appealing for low-productivity individuals who are likely to fail. Along with other features of real-life tests, this rationalizes the very low success rates of some optional admission and publication processes.
Waiting lists are used to allocate scarce resources when demand exceeds supply and pricing mechanisms are insufficient or inappropriate. We examine the interplay of strategic behavior of agents in waiting lists and supply-side interventions, such as improvements in resource quality and arrival rates. Using a dynamic assignment model and fixing the service discipline to First Come, First Served (FCFS), we show that such interventions can unintentionally increase waste and waiting time by making agents more selective. These are the first known formal analytical results on the effect of supply shocks on overall system performance in the presence of agent choice.
We consider an evidence game in which a principal seeks to award a high-quality agent. Agents, competing for the award, may hold evidence about their own and peers’ qualities (i.i.d. good or bad) as determined by a network. They can conceal or disclose each piece of evidence to the principal. Baumann and Dutta (2026) analyze the sequential equilibria where the principal has no commitment power and moves last. We show that with commitment power, the principal cannot achieve her first-best outcome. However, she can improve on the outcome of the adversarial disclosure equilibrium identified by Baumann and Dutta (2026), which is a sequentially stable outcome that is principal-preferred to the outcome of any equilibrium in iteratively interim undominated strategies.
In expected utility theory (EUT) risk preferences are entirely captured by the curvature of (Bernoulli) utility function. This note presents a minor one-parameter generalization of EUT that disentangles the two. The preference foundation (axiomatization) of the new model rests on completeness, transitivity, continuity, Thomsen condition, dominance, and one new axiom (a weaker version of the independence axiom of EUT).
