This paper investigates why subjects in laboratory experiments on quantity precommitment games consistently choose capacities above the Cournot level - the subgame-perfect equilibrium. We argue that this puzzling regularity may be attributed to players' perceptions of their opponents' skill or...

The paper demonstrates that, even when firms' initial moves are simultaneous, the mere opportunity to wait out the opponent's move may be as harmful as a secondmover disadvantage.

This paper examines if international trade can reduce total welfare in an international oligopoly with differentiated goods. We show that welfare is a U-shaped function in the transport cost as long as trade occurs in equilibrium. With a Cournot duopoly trade can reduce welfare compared to...

We study the product turnover in an industry and, in particular, the survival of new products. The data set consists of monthly sales of all products sold in the Swedish beer market over the time period of 1989-1995. The death rates of newly introduced products are high - out of 199 products an...