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On a homogeneous oligopoly market informed sellers are fully aware of market demand whereas uninformed sellers only know the distribution. We first derive the market results when sellers are risk averse, similarly to Ponssard (1979) who assumed risk neutrality throughout. With the help of these...
Persistent link: https://www.econbiz.de/10009612010
The endowment effect describes the fact that people demand much more to give up an object than they are willing to spend to acquire it. The existence of this effect has been documented in numerous experiments. We attempt to explain this effect by showing that evolution favors individuals whose...
Persistent link: https://www.econbiz.de/10009657123
Studying evolutionarily successful behavior we show in a general framework that when individuals maximizing payoff differentials invest resources in punishing others. Interestingly, these investments are increasing in individuals, own wealth and decreasing in the wealth of others.
Persistent link: https://www.econbiz.de/10009574881
. Finally, we apply this general theory to a number of applications like the Nash demand game, the War of Attrition, Cournot and …
Persistent link: https://www.econbiz.de/10009578001
The evolution of trustworthiness as a major aspect of business ethics depends crucially on whether it can be signaled. If this is impossible, only opportunistic traders will survive. Whereas previous studies have analysed detection agencies (Güth and Kliemt, 1994 and 1998) or have substituted...
Persistent link: https://www.econbiz.de/10009578022
theory ; Intrinsic motivation ; Court system ; Legal litigation ; Hobbesian problem of social order …
Persistent link: https://www.econbiz.de/10009657895
that are well known from game theory and evolutionary game theory to solve these games. For illustration we include two …
Persistent link: https://www.econbiz.de/10009580475
Adopting the indirect evolutionary approach, we show that it might be beneficial for firms on a heterogeneous market not only to care for their profits but also for their respective customers' welfare. -- evolutionary stability ; customer orientation ; heterogenous market ; duopoly
Persistent link: https://www.econbiz.de/10009612021
In a recent paper Bagwell (1995) pointed out that only the Cournot outcome, but not the Stackelberg outcome, can be supported by a pure Nash equilibrium when actions of the Stackelberg leader are observed with the slightest error. The Stackelberg outcome, however, remains close to the outcome of...
Persistent link: https://www.econbiz.de/10009657122
In a complete financial market every contingent claim can be hedged perfectly. In an incomplete market it is possible to stay on the safe side by superhedging. But such strategies may require a large amount of initial capital. Here we study the question what an investor can do who is unwilling...
Persistent link: https://www.econbiz.de/10009574876