No abstract

David Lewis is widely credited with the first formulation of common knowledge and the first rigorous analysis of convention. However, common knowledge and convention entered mainstream game theory only when they were formulated, later and independently, by other theorists. As a result, some of the most distinctive and valuable features of Lewis' game theory have been overlooked. We re-examine this theory by reconstructing key parts in a more formal way, extending it, and showing how it differs from more recent game theory. In contrast to current theories of common knowledge, Lewis' theory is based on an explicit analysis of the modes of reasoning that are accessible to rational individuals and so can be used to analyse the genesis of common knowledge. Lewis' analysis of convention emphasises the role of inductive reasoning and of salience in the maintenance of conventions over time.

The common ratio effect is a well-attested violation of expected utility theory. This paper uses four principles of dynamic choice to characterise alternative theoretical strategies for explaining the effect. It reports an experiment which tests these principles and, by implication, several well-known accounts of the common ratio effect. Unlike previous work, the experimental design uses real ®nancial incentives without presupposing any dynamic choice principles. We ®nd violation of a principle of`timing independence', which is part of most existing theories of dynamic choice. We examine the implications of this ®nding for decision theory and economics.

Framing effects, Punishment, Emotions, Public goods experiments, C92, D01, H41,

The paper considers what can be inferred about experimental subjects’ time preferences for consumption from responses to laboratory tasks involving tradeoffs between sums of money at different dates, if subjects can reschedule consumption spending relative to income in external capital markets. It distinguishes three approaches identifiable in the literature: the straightforward view; the separation view; and the censored data view. It shows that none of these is fully satisfactory and discusses the resulting implications for intertemporal decision-making experiments. Copyright Economic Science Association 2007Discount rates, Elicitation of time preferences, Intertemporal decision-making experiments,