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Industry Structure and Pricing over the Business Cycle

Spiegel, Yossi; Stahl, Konrad O. - CESifo - 2014

We consider the interaction between an incumbent firm and a potential entrant, and examine how this interaction is affected by demand fluctuations. Our model gives rise to procyclical entry, prices, and price-cost margins, although the average price in the market can be countercyclical if the...

Persistent link: https://www.econbiz.de/10010877829

The Weak Rationality Principle in Economics

Kirchgässner, Gebhard - CESifo - 2005

The weak rationality principle is not an empirical statement but a heuristic rule of how to proceed in social sciences …-foundation and, therefore, employ the rationality assumption in economic models. Then, with reference to the ‘bounded rationality … a part of the rationality assumption. We conclude with some remarks on handling the problems of ‘free will’ as well as …

Persistent link: https://www.econbiz.de/10005406455

Are Groups more Rational than Individuals? A Review of Interactive Decision Making in Groups

Kugler, Tamar; Kausel, Edgar E.; Kocher, Martin G. - CESifo - 2012

consistent in revealing that groups behave closer to the game-theoretical assumption of rationality and selfishness than …

Persistent link: https://www.econbiz.de/10009416117

Ambiguity Aversion is the Exception

Kocher, Martin G.; Lahno, Amrei M.; Trautmann, Stefan T. - CESifo - 2015

An extensive literature has studied ambiguity aversion in economic decision making, and how ambiguity aversion can account for empirically observed violations of expected utility-based theories. Almost all relevant applied models presume a general dislike of ambiguity. In this paper, we provide...

Persistent link: https://www.econbiz.de/10011205383

A Theory of Reciprocity

Falk, Armin; Fischbacher, Urs - CESifo - 2001

This paper presents a formal theory of reciprocity. Reciprocity means that people reward kind actions and punish unkind ones. The theory takes into account that people evaluate the kindness of an action not only by its consequences but also by the intention underlying this action. The theory...

Persistent link: https://www.econbiz.de/10005765909

Low Price Equilibrium in Multi-Unit Auctions: The GSM Spectrum Auction in Germany

Grimm, Veronika; Riedel, Frank; Wolfstetter, Elmar G. - CESifo - 2001

The second-generation GSM spectrum auction in Germany is probably the most clear cut example of a low price outcome in a simultaneous ascending-bid auction.The present paper gives an account of the events, describes the auction rules and market conditions, and provides a theoretical explanation...

Persistent link: https://www.econbiz.de/10005181274

The Penalty-Duel and Institutional Design: Is there a Neeskens-Effect?

Leininger, Wolfgang; Ockenfels, Axel - CESifo - 2008

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Persistent link: https://www.econbiz.de/10005181276

Appropriating the Commons A Theoretical Explanation

Falk, Armin; Fehr, Ernst; Fischbacher, Urs - CESifo - 2001

In this paper we show that a simple model of fairness preferences explains major experimental regularities of common pool resource (CPR) experiments. The evidence indicates that in standard CPR games without communication and without sanctioning possibilities inefficient excess appropriation is...

Persistent link: https://www.econbiz.de/10005181497

The Third Generation (UMTS) Spectrum Auction in Germany

Grimm, Veronika; Riedel, Frank; Wolfstetter, Elmar G. - CESifo - 2001

The third generation UMTS auction in Germany raised an enormous amount of revenue, and at the same time achieved a more competitive market structure than other UMTS auctions in Europe. The present paper explains the design of that auction, and presents a game theoretic explanation of observed...

Persistent link: https://www.econbiz.de/10005094495

The Bail-Out! Positive Political Economics of Greek-type Crises in the EMU

Fahrholz, Christian; Wójcik, Cezary - CESifo - 2010

The Greek bail-out was highly controversial. An oft-heard assessment is that i) the bail-out was a mistake, ii) the political haggling over it was irrational and iii) the bail-out will create a moral hazard problem. Contrary to this view, our analysis suggests that, given EMU’s present...

Persistent link: https://www.econbiz.de/10008671732