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Advertising and endogenous exit in a differentiated duopoly

Mantovani, Andrea; Mion, Giordano - London School of Economics (LSE) - 2006

In this paper we consider a two-stage duopoly game where firms first decide whether to invest in advertising and then … compete in prices. Advertising has two effects: a market enlargement for both firms and a predatory gain for the investing … investment in advertising and that strong product substitutability may induce a coordination problem. …

Persistent link: https://www.econbiz.de/10011071103

Anti-evasion auditing policy in the presence of common income shocks

Sanchez-Villalba, Miguel - London School of Economics (LSE) - 2006

When fairly homogeneous taxpayers are affected by common income shocks, a tax agency’s optimal auditing strategy consists of auditing a low-income declarer with a probability that (weakly) increases with the other taxpayers’ declarations. Such policy generates a coordination game among...

Persistent link: https://www.econbiz.de/10010928739

Peering into the mist: social learning over an opaque observation network

Barrdear, John - London School of Economics (LSE) - 2014

I present a model of social learning over an exogenous, directed network that may be readily nested within broader macroeconomic models with dispersed information and combines the attributes that agents (a) act repeatedly and simultaneously; (b) are Bayes-rational; and (c) have strategic...

Persistent link: https://www.econbiz.de/10011126293

Do we follow others when we should? A simple test of rational expectations

Weizsacker, Georg - London School of Economics (LSE) - 2008

The paper presents a new meta data set covering 13 experiments on the social learning games by Bikhchandani, Hirshleifer, and Welch (1992). The large amount of data makes it possible to estimate the empirically optimal action for a large variety of decision situations and ask about the economic...

Persistent link: https://www.econbiz.de/10011071475

Video killed the radio star? Online music videos and digital music sales

Kretschmer, Tobias; Peukert, Christian - London School of Economics (LSE) - 2014

Sampling poses an interesting problem in markets with experience goods. Free samples reveal product quality and help consumers to make informed purchase decisions (promotional effect). However, sampling may also induce consumers to substitute purchases with free consumption (displacement...

Persistent link: https://www.econbiz.de/10011126443

Equilibrium bids in sponsored search auctions: theory and evidence

Borgers, Tilman; Cox, Ingemar; Pesendorfer, Martin; … - London School of Economics (LSE) - 2013

This paper presents a game theoretic analysis of the generalized second-price auction that the company Overture operated in 2004 to sell sponsored search listings on search engines. We construct a model that embodies few prior assumptions about parameters, and we present results that indicate...

Persistent link: https://www.econbiz.de/10011126718

Follower payoffs in symmetric duopoly games

von Stengel, Bernhard - London School of Economics (LSE) - 2010

This paper compares the leader and follower payoff in a duopoly game, as they arise in sequential play, with the Nash payoff in simultaneous play. If the game is symmetric, has a unique symmetric Nash equilibrium, and players' payoffs are monotonic in the opponent's choice along their own best...

Persistent link: https://www.econbiz.de/10010744848

Speculative attacks and financial architecture: experimental analysis of coordination games with public and private information

Heinemann, Frank; Nagel, Rosemarie; Ockenfels, Peter - London School of Economics (LSE) - 2002

Speculative Attacks can be modeled as a coordination game with multiple equilibria if the state of the economy is common knowledge. With private information there is a unique equilibrium. This raises the question whether public information may be destabilizing by allowing for self-fulfilling...

Persistent link: https://www.econbiz.de/10010745943

Dynamic voting in clubs

Roberts, Kevin - London School of Economics (LSE) - 1999

This paper examines the process and outcomes of democratic decision-making in clubs where a club is defined by their sets of members whose preferences and decisions relate to the set of members in the club: the electorate to endogenous. Examples range from international organizations like the...

Persistent link: https://www.econbiz.de/10010746583

On the theory of ethnic conflict

Caselli, Francesco; Coleman, Wilbur John - London School of Economics (LSE) - 2013

When considering engaging in conflict to secure control of a resource, a group needs to predict the amount of post-conflict leakage due to infiltration by members of losing groups. We use this insight to explain why conflict often takes place along ethnic lines, why some ethnic groups are more...

Persistent link: https://www.econbiz.de/10011126000

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