The paper proposes a theory of the anti-competitive effects of debt finance based on the interaction between capital structure, managerial incentives, and firms' ability to sustain collusive agreements. It shows that shareholders' commitments that reduce conflicts with debtholders - such as...

The relationships between firms' size, age and their growth rate are examined for a large sample of micro and small firms in Sweden. These firms have employees numbering in the range of 1-100 and are operating in a geographically concentrated area. Micro and small firms dominate the industrial...

We find that contrary to common perception, cooperation as equilibrium of the infinitely repeated discounted prisoner's dilemma is in many relevant cases not very plausible, or at least questionable: for a significant subset of the payoff-discount factor parameter space cooperation equilibria...

Why do money and markets crowd out cooperative relations? This paper characterizes the effects of intertemporal preferences, money, and markets on players' ability to cooperate in material-payoff supergames. Players' aversion to intertemporal substitution facilitates cooperation by decreasing...

In this paper I define an evolutionary stability criterion for learning rules. Using Monte Carlo simulations, I then apply this criterion to a class of learning rules that can be represented by Camerer and Ho's (1999) model of learning. This class contains perturbed versions of reinforcement and...

This is a dictionary entry forthcoming in Peter Newman, ed. The New Palgrave Dictionary of Economics and the Law, London: Macmillan, 1998.

This paper examines the effects of search costs on prices in a Bertrand duopoly. It is shown that if the search cost is lowered, the expected price goes down in a single play of the stage game. However, if the game is repeated it may be easier to sustain collusion the lower the search cost. In...

The literature on deregulated electricity markets generally assumes available capacities to be given. In contrast, this paper studies a model where firms precommit to capacity levels before competing in a uniform price auction. The analysis sheds light on recent empirical findings that firms use...

Many of the world's common pool resources are located in poor countries, where consumption levels may be low enough to adversely affect the users' health. Under these circumstances, an agent's utility function may be described as an S-shaped function of consumption. Using non-cooperative game...

In a strategic game, a curb set [Basu and Weibull, Econ. Letters 36 (1991) 141] is a product set of pure strategies containing all best responses ro every possible belief restricted to this set. Prep sets [Voorneveld, Games Econ. Behav. 48 (2004) 403] relax this condition by only requiring the...