A number of products that display positive network effects are used in variable quantities by heterogeneous customers. Examples include corporate operating systems, infrastructure software, web services and networking equipment. In many of these contexts, the magnitude of network effects are...

We provide some existence results of stable pricings for natural monopoly as defined in the theory of contestable markets. The main addings are based on the assumption of separated markets and the possibilities of entries. We borrow tools from cooperative game theory. Following the work of...

Edgeworth exchange is the fundamental general equilibrium model, yet equilibrium predications and theories of price adjustment for this model remain untested. This paper reports an experimental test of Edgeworth exchange which demonstrates that prices and allocations converge sharply to the...

The role that Bernanke’s Bad News Principle plays in the modern theory of investment under uncertainty is analyzed. The analysis shows that the actual investment dilemma is that by delaying investment firms trade off a higher present value of earnings for a lower present value of the...

This paper studies an auction model in which one of the bidders, the insider, has better information about a common component of the value of the good for sale, than the other bidders, the outsiders. Our main result shows that the insider may have incentives to disclose her private information...

We develop a model of information processing and strategy choice for participants in a double auction. Sellers in this model form beliefs that an offer will be accepted by some buyer. Similarly, buyers form beliefs that a bid will be accepted. These beliefs are formed on the basis of observed...

This paper evaluates performance of human subjects and instances of a bidding model that interact in continuous ­time double auction experiments. Asks submitted by instances of the seller model (``automated sellers'') maximize the seller's expected surplus relative to a heuristic belief...

We show that an asymptotic envy-freeness is a necessary condition for a form of robust approximate implementation in large economies.

We present a general equilibrium model that encompasses the endogenous selection of a set of tradeable commodities. At its foundation we introduce the notion of a trade infrastructure as a set of social institutions describing the trade and production technologies available to the agents in the...

Presented here is the economical model with one commodity that is produced by two independent business entities. Investigated is the mutual impact of entities on each other, and formally described is the dynamics of competitive behavior. The research techniques and results are based on the...