The authors modify the standard principal-agent model with oral hazard by allowing the contract to be renegotiated after the agent's choice of action and before the observation of the action's consequences. In equilibrium, the agent randomizes over effort levels. The optimal contract gives the...

This article studies the implications of learning-by-doing for market conduct and performance. We use a general continuous-time model to show that output increases over time in the absence of strategic interactions, and that a monopolist learns too slowly, compared with the social optimum. We...

Noncooperative game theory is a way of modelling and analyzing situations in which each player's optimal decisions depend on his beliefs or expectations about the play of his opponents. Game-theoretic methodology has caused deep and wide-reaching changes in the way that practitioners think about...

We study monopoly pricing of overlapping generations of a durable good. We consider two sorts of goods: those with an active secondhand market and anonymous consumers, such as textbooks, and those with no secondhand market and consumers who can prove that they purchased the old good to qualify...

We propose a new theory of predation based on "signal-jamming." In our model the predator's characteristics are common knowledge, while the entrant is uncertain of his own future profitability. The entrant uses his current profit to decide whether to remain in the market, and the predator preys...