In experiments with two-person sequential games we analyze whether responses to favorable and unfavorable actions depend on the elicitation procedure. In our "hot" treatment the second player responds to the first player's observed action while in our "cold" treatment we follow the "strategy...

While the theoretical industrial organization literature has long argued that excess capacity can be used to deter entry into markets, there is little empirical evidence that incumbent firms effectively behave in this way. Bagwell and Ramey (1996) propose a game with a specific sequence of moves...

In the framework of the provision of one pure public good, we characterize the class of strategy-proof voting schemes on single-plateaued preferences over a convex and closed subset of the real line (the set of feasible levels of the public good).

Under not-too-stringent assumptions this study shows that there exists a generic extensive-form game having no "strategically stable" equilibrium. In addition, it is suggested that careless invocation of "common belief assumption" may be a potential source of inconsistent beliefs for players.

We study how the heterogeneity of agents affects the extent to which changes in financial incentives can pull a group out of a situation of coordination failure. We focus on the connections between cost asymmetries and leadership. Experimental subjects interact in groups of four in a series of...

In this paper we consider the spatial model by Anderson and Neven (1991) to study the subgame perfect equilibria without restricting the consumers' reservation price. New equilibria emerge where firms locate at disperse points in space. Also, at equilibrium, firms may monopolize some segments of...