this paper is an investigation of how recursive communication systems can come to be. In particular, the investigation explores the possibility that such a system could emerge among the members of a population as the result of a process I characterize as "negotiation," because each individual both contributes to, and conforms with, the system 1

Starting from an example of the Allies ’ decision to feint at Calais and attack Normandy on D-Day, this paper models misrepresentation of intentions to competitors or enemies. Allowing for the possibility of bounded strategic rationality and rational players ’ responses to it yields a sensible account of lying via costless, noiseless messages. In some leading cases, the model has generically unique pure-strategy sequential equilibria, in which rational players exploit boundedly rational players, but are not themselves fooled. In others, the model has generically essentially unique mixed-strategy sequential equilibria, in which rational players’ strategies protect all players from exploitation. (JEL C72, D72, D80) Lord, what fools these mortals be! —Puck, A Midsummer Night’s Dream, Act 3 You may fool all the people some of the time; you can even fool some of the people all the time; but you can’t fool all of the people all the time.

this paper is on procedures whereby new (e.g., juvenile) members of a population could learn to communicate with the other members by observing their communicative behavior. Two apparently distinct issues are relevant to the evaluation of such learning procedures. First, the procedure must enable the new members to accurately acquire the communication system of the population, even though their observations may be limited, noisy, or otherwise misleading. Second, the learning procedure used by its new members will affect the population's communication system over time. The use of a particular procedure might result in the population's communication increasing in coordination, ultimately yielding a nearly optimally coordinated system. If a learning procedure were to satisfy both criteria, it could explain how learned communication systems are maintained over time, as well as how they are established in the first place.

Privately informed individuals speak openly in front of other members of a committee about the desirability of a public decision. Each individual wishes to appear well informed. For any given order of speech, committee members may herd by suppressing their true information. With individuals of heterogeneous expertise, optimizing over the order of speech can improve the extraction of information, but not perfectly so. It is not always optimal to use the common anti-seniority rule whereby experts speak in order of increasing expertise. A committee with more able experts may be afflicted by greater herding problems, yielding a worse outcome.

We address the issue of rational communicative behavior among autonomous self-interested agents that have to make decisions as to what to communicate, to whom, and how. Following decision theory, we postulate that a rational speaker should design a speech act so as to optimize the benefit it obtains as the result of the interaction. We quantify the gain in the quality of interaction in terms of the expected utility, and we present a framework that allows an agent to compute the expected utilities of various communicative actions. Our framework uses the Recursive Modeling Method as the specialized representation used for decision-making in a multi-agent environment. This representation includes information about the agent's state of knowledge, including the agent's preferences, abilities and beliefs about the world, as well as the beliefs the agent has about the other agents, the beliefs it has about the other agents' beliefs, and so on. Decision-theoretic pragmatics of a comm...

A unifying theme in the literature on organizations such as public bureaucracies and private non-pro…ts is the importance of missions, as opposed to pro…t, as an organizational goal. Such mission-oriented organizations are frequently sta¤ed by motivated agents who subscribe to the mission. This paper studies incentives in such contexts and emphasizes the role of matching principals’and agents’mission preferences in increasing organizational e ¢ ciency and reducing the need for highpowered incentives. The framework developed in this paper is applied to nonpro…ts, school competition, and incentives in the public sector. The authors would like thank numerous seminar participants as well Daron Acemoglu, Alberto

We consider a general equilibrium model with endogenous human capital formation in which ex ante identical groups may be treated differently in equilibrium due to informational externalities. Unlike earlier models of statistical discrimination, group inequalities may arise even if the corresponding model with a single group has a unique equilibrium. The dominant group gains from discrimination, rationalizing why a majority may be reluctant to eliminate discrimination. The model is also consistent with "reverse discrimination" as a remedy against discrimination since it may be necessary to decrease the welfare of the dominant group to achieve parity.

We provide new and tight lower bounds on the ability of players to implement equilibria using cheap talk, that is, just allowing communication among the players. One of our main results is that, in general, it is impossible to implement three-player Nash equilibria in a bounded number of rounds. We also give the first rigorous connection between Byzantine agreement lower bounds and lower bounds on implementation. To this end we consider a number of variants of Byzantine agreement and introduce reduction arguments. We also give lower bounds on the running time of two player implementations. All our results extended to lower bounds on (k, t)-robust equilibria, a solution concept that tolerates deviations by coalitions of size up to k and deviations by up to t players with unknown utilities (who may be malicious).

We address the issue of rational communicative behavior among autonomous intelligent agents that have to make decisions as to what, to whom, and how to communicate. We treat communicative actions as aimed at increasing the efficiency of interaction among agents. We postulate that a rational speaker design a speech act so as to maximally increase the benefit obtained as the result of the interaction. We quantify the gain in the quality of interaction as the expected utility, and we present a framework that allows an agent to compute the expected utility of various communicative actions. Our framework uses the Recursive Modeling Method as the representation of the agent's state of knowledge, including the agent's preferences, abilities and beliefs about the world, as well as the beliefs the agent has about the other agents, the beliefs it has about the other agents ' beliefs, and so on. A decision-theoretic pragmatics of a communicative act can be then defined as the transformation it induces on the agent's state of knowledge about its decision-making situation. This transformation leads to a change in the quality of the interaction, expressed in terms of the benefit to the agent. We analyze decision-theoretic pragmatics of a number of important communicative acts, and investigate their expected utility using examples.

In this paper I will discuss why (un) marked expressions typically get an (un)marked interpretation: Horn's division of pragmatic labor. It is argued that it is a conventional fact the we use language this way. This convention will be explained in terms of equilibria of signalling games introduced by Lewis (1969) but now in an evolutionary setting. I will also relate this signalling game analysis with Blutner's (2000) bi-directional optimality theory and with Parikh's (1991, 2000) game-theoretical analysis of successful communication.