It is well known that in a two stage duopoly model of product choice with quadratic transportation cost, the firms locate at the extreme endpoints of the market. This paper examines this model in an infinite horizon setting where in the initial period the firms choose locations and in subsequent...

This paper first inverts a general class of matrices for solving Bertrand equilibria from arbitrary coalition structures in linear Bertand oligopolies. It then studies merger incentives and obtains two main results; 1) for any asymmetric costs, mergers of any size are profitable; 2) a merger will...

We introduce capacity constrained competition between market-making intermediaries in a model in which agents can choose between trading with intermediaries, joining a search market or remaining inactive. Recently, market-making by a monopolistic intermediary has been analyzed by Rust and Hall...

There are a lot of goods which have network externalities. While the number of players who have such a good is small, they may not get enough utility from the goods. That is, players have an incentive to delay their decision, when they purchase the goods with network externalities. Delay causes...

In this paper, an infinitely-repeated Bertrand game is considered. The model has a two-tier relationship; two firms make a self-enforced collusive agreement and each firm writes a law-enforced contract to its privately-informed agent. The main finding is that in optimal collusion, interaction...

Can advertising lead to a sustainable competitive advantage? To answer this question, we propose a dynamic model of advertising competition where firms repeatedly advertise, compete in the product market, and make entry as well as exit decisions. Within this dynamic framework, we study two...

This paper studies the strategic value of delegation in dynamic interactions, where principals provide managers with intertemporal incentives in order to obtain a competitive advantage. While direct management offers intertemporal commitment opportunities, the separation of ownership from...

The paper studies equilibrium selection in supermodular games based on a class of perfect foresight dynamics, introduced by Matsui and Matsuyama (JET 1995) and further developed by Hofbauer and Sorger (JET 1999, IGTR 2002) and Oyama (JET 2002). A normal form game is played repeatedly in a large...

This paper analyzes bidding behavior in a multi period multiple unit auction. While bidders are ex ante symmetric, the first period outcome translates the second period game to a game between asymmetric bidders. The first period outcome determines who will be a strong or a weak bidder in the...

This paper analyzes a stochastic model of evolution in normal form games. The long-run behavior of individuals in this model is investigated in the limit where mutation rates tend to zero, while the expected number of mutations, and hence population sizes, tend to infinity. It is shown that...