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Table of Contents
Abstract; 1 Introduction; References; 2 Ambiguity, Robustness, and Contract Design; 2.1 A Model of Ambiguity Aversion; 2.2 Equilibrium Theory and Ambiguity; 2.3 Ambiguity Aversion and the Myerson-Satterthwaite Theorem; 2.4 Ambiguity Aversion, Moral Hazard, and Contractual Incompleteness; 2.5 Some Other Economic Effects of Pessimism; 2.5.1 Robustness and Linear Contracts: Uncertainty Over Agent's Actions; 2.5.2 Monetary Equilibria with Wary Agents; 2.6 Concluding Remarks; References; 3 Evolution of Preferences, Social Norms, and Decision Rules; 3.1 Evolution of Preferences
3.1.1 Evolution of Optimal Preferences Under Bounded Rationality3.2 Evolution of Decision Rules; 3.3 Evolution of Social Norms; 3.3.1 Evolution of Conventions with Mobile Players and Spatially Homogeneous Payoffs; 3.3.1.1 The Long-Run Outcome; 3.3.1.2 The Medium-Run Outcomes; 3.3.1.3 The Model with Spatially Heterogeneous Payoffs; 3.4 On Coevolution of Preferences, Social Norms, and Decision Rules; References; 4 Complexity Constraints and Optimal Contracts; 4.1 A Model of Computational Complexity; 4.1.1 A Formal Model; 4.2 A Model of Linguistic Complexity
4.3 Complexity as the Number of Unforeseen Contingencies4.4 Complexity and Economics: A Summary; References; 5 Probabilistic Choice and Optimal Contracts; 5.1 Trembling Hands and Optimal Screening; 5.2 Nonlinear Pricing Under Bounded Rationality; 5.2.1 Mussa and Rosen Model Revisited; 5.2.2 Introducing Bounded Rationality in the Mussa and Rosen Model; 5.3 Bounded Rationality and the Revelation Principle; 5.3.1 A Model of Boundedly Rational Behavior; 5.3.2 The Optimal Menu of Contracts and a Comparison with Some Other Mechanisms; 5.4 Oligopoly, Bounded Rationality, and Optimal Obfuscation
5.4.1 The Bertrand Model with Boundedly Rational Consumers5.5 Emotional Temperature and the Power of Optimal Incentives; 5.5.1 Optimal Emotional Temperature; 5.5.2 Effect of Emotional Temperature on the Power of Optimal Incentives; 5.6 All-Pay Auctions with Boundedly Rational Bidders; References; 6 Bounded Rationality, Learning, and Optimal Contracts; References; 7 Social Norms and Optimal Contracts; 7.1 A Model of Reciprocal Wage Setting; 7.1.1 An Evolutionary Model of Reciprocity; 7.2 When to Hire a Local?
7.3 Optimal Contracting Model in a Social Environment and Trust-Related Psychological Costs7.4 High-Performance Work Systems and Interaction-Based Approach to Socioeconomic Behavior; 7.5 Social Norms and Incentives: What Have We Learned?; References; 8 Miscellaneous Models; 8.1 Monopoly Pricing with Viscous Demand and Customer Turnover; 8.1.1 A Model of Viscous Demand; 8.1.2 The Customer Turnover Rate and the Monopolist's Profits; 8.2 Auctions with Opportunistic Experts; 8.2.1 The Model; 8.3 A Model of Boundedly Rational Addiction; 8.3.1 The Model
3.1.1 Evolution of Optimal Preferences Under Bounded Rationality3.2 Evolution of Decision Rules; 3.3 Evolution of Social Norms; 3.3.1 Evolution of Conventions with Mobile Players and Spatially Homogeneous Payoffs; 3.3.1.1 The Long-Run Outcome; 3.3.1.2 The Medium-Run Outcomes; 3.3.1.3 The Model with Spatially Heterogeneous Payoffs; 3.4 On Coevolution of Preferences, Social Norms, and Decision Rules; References; 4 Complexity Constraints and Optimal Contracts; 4.1 A Model of Computational Complexity; 4.1.1 A Formal Model; 4.2 A Model of Linguistic Complexity
4.3 Complexity as the Number of Unforeseen Contingencies4.4 Complexity and Economics: A Summary; References; 5 Probabilistic Choice and Optimal Contracts; 5.1 Trembling Hands and Optimal Screening; 5.2 Nonlinear Pricing Under Bounded Rationality; 5.2.1 Mussa and Rosen Model Revisited; 5.2.2 Introducing Bounded Rationality in the Mussa and Rosen Model; 5.3 Bounded Rationality and the Revelation Principle; 5.3.1 A Model of Boundedly Rational Behavior; 5.3.2 The Optimal Menu of Contracts and a Comparison with Some Other Mechanisms; 5.4 Oligopoly, Bounded Rationality, and Optimal Obfuscation
5.4.1 The Bertrand Model with Boundedly Rational Consumers5.5 Emotional Temperature and the Power of Optimal Incentives; 5.5.1 Optimal Emotional Temperature; 5.5.2 Effect of Emotional Temperature on the Power of Optimal Incentives; 5.6 All-Pay Auctions with Boundedly Rational Bidders; References; 6 Bounded Rationality, Learning, and Optimal Contracts; References; 7 Social Norms and Optimal Contracts; 7.1 A Model of Reciprocal Wage Setting; 7.1.1 An Evolutionary Model of Reciprocity; 7.2 When to Hire a Local?
7.3 Optimal Contracting Model in a Social Environment and Trust-Related Psychological Costs7.4 High-Performance Work Systems and Interaction-Based Approach to Socioeconomic Behavior; 7.5 Social Norms and Incentives: What Have We Learned?; References; 8 Miscellaneous Models; 8.1 Monopoly Pricing with Viscous Demand and Customer Turnover; 8.1.1 A Model of Viscous Demand; 8.1.2 The Customer Turnover Rate and the Monopolist's Profits; 8.2 Auctions with Opportunistic Experts; 8.2.1 The Model; 8.3 A Model of Boundedly Rational Addiction; 8.3.1 The Model