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...

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...

Why would a political elite voluntarily dilute its political power by extending the voting franchise? This paper develops a dynamic recursive framework for studying voter enfranchisement. We specify a class of dynamic games in which political rights evolve over time. Each period, private...

This paper examines empirically the players’ intrabrand vertical price control, interbrand horizontal pricing coordination, and their learning process to equilibrium in a rare natural experiment of supergame where a well defined simultaneous-move price setting stage game is repeated every...

This paper formulates a model of dynamic, endogenous reform of political institutions. Specifically, a class of dynamic political games (DPGs) is introduced in which institutional choice is both recursive and instrumental. It is recursive because future political institutions are decided under...

A (pure) strategy in a repeated game is a mapping from histories, or, more generally, signals, to actions. We view the implementation of such a strategy as a computational procedure and attempt to capture in a formal model the following intuition: as the game proceeds, the amount of information...

Subgame Perfect Correlated Equilibria in Repeated Games by Pavlo Prokopovych and Lones Smith ABSTRACT This paper investigates discounted infinitely repeated games with observable actions extended with an extensive form correlation device. Such games capture situations of repeated interaction of...

Competitive agents extract in continuous time from a commons. Capital market access allows them to both save and borrow against their extraction stream. When the commons asset grows more quickly than the privately stored one, multiple equilibria are found for intermediate commons endowments. One...