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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

Immediate Demand Reduction in Simultaneous Ascending Bid Auctions (new title: Immediate demand reduction in simultaneous ascending-bid auctions: a uniqueness result)

Riedel, Frank; Wolfstetter, Elmar G. - CESifo - 2004

The present note analyzes the Simultaneous Ascending Bid Auction with arbitrarily many bidders with decreasing marginal valuations under complete information. We show that the game is solvable by iterated elimination of weakly dominated strategies if the efficient allocation assigns at least one...

Persistent link: https://www.econbiz.de/10005406019

International Environmental Agreements with Uncertainty, Learning and Risk Aversion

Finus, Michael; Pintassilgo, Pedro; Ulph, Alistair - CESifo - 2014

This paper analyses the formation of international environmental agreements (IEAs) under uncertainty, focusing on the role of learning and risk aversion. It bridges two strands of literature: one focused on the role learning for the success of IEA formation when countries are risk neutral and...

Persistent link: https://www.econbiz.de/10010736746

A Strategic R&D Investment with Flexible Development Time in Real Option Game Analysis

Villani, Giovanni - CESifo - 2009

The real option theory provides a useful tool to evaluate an R&D investment under uncertainty because, unlike the NPV (Net Present Value), it considers the managerial flexibility that may be expand the investment opportunity value. However, most R&D investment projects are open to competing...

Persistent link: https://www.econbiz.de/10005013067

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

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

Separating the Hawks from the Doves: Evidence from Continuous Time Laboratory Games

Oprea, Ryan; Henwood, Keith; Friedman, Daniel - CESifo - 2010

Human players in our laboratory experiment received flow payoffs over 120 seconds each period from a standard Hawk-Dove bimatrix game played in continuous time. Play converged closely to the symmetric mixed Nash equilibrium under a one-population matching protocol. When the same players were...

Persistent link: https://www.econbiz.de/10008511594