We consider the question whether top tennis players in a top tournament (Wimbledon) employ an optimal (efficient) service strategy.We show that top players do not, in general, follow an optimal strategy, and we provide a lower bound of the inefficiency.The inefficiency regarding winning a point...

Recent insights from the ‘embodied cognition’ perspective in cognitive science, supported by neural research, provide a basis for a ‘methodological interactionism’ that transcends both the methodological individualism of economics and the methodological collectivism of (some) sociology,...

This paper uses a cognitive theory of firms and organizations, with a focus on learning and innovation.Here, cognition is a wide notion, including value judgments and corresponding feelings and emotions.This paper focuses on the relation between that cognitive theory and Penrose's theory of the...

It is shown that asymmetry in R&D efficiency between firms is an important factor determining feasibility of the preemption and attrition scenarios in competitive R&D with time to build. Scenarios of attrition and preemption games are most likely to occur when competitors have similar R&D...

The two major methods of explaining economic institutions, namely by strategic choices or by (indirect) evolution, are compared for the case of a homogenous quadratic duopoly market. Sellers either can provide incentives for their agents to care for sales (amounts) or evolve as sellers who care...

We provide a modeling framework to think about selective contracting in the health care sector. Two health care providers differ in quality and costs. When buying health insurance, consumers observe neither provider quality nor costs. We derive an equilibrium where health insurers signal...

This paper demonstrates that the reason for widespread default of mortgages in the subprime market was a sudden reversal in the house price appreciation of the early 2000's. Using loan-level data on subprime mortgages, we observe that the majority of subprime loans were hybrid adjustable rate...

The process of innovation is driven by two main factors: new inventions and institutions supporting the transformation of inventions into marketable innovations. This paper proposes a new institution, called a semi- public contest, that has been neglected by the economic literature but exists...

Some results can be readily applied. For example, overinsurance, i.e. insurance levels above first best as in 'Cadillac' insurance plans, can be rationalized. In a non-linear pricing framework, the model also provides an explanation for marginal prices below marginal costs as observed in flat...

It is well established that an incumbent firm may use exclusivity contracts so as to monopolize an industry or deter entry. Such an anticompetitive practice could be tolerated if it were associated with sufficiently large efficiency gains, e.g. insuring buyers against price volatility. In this...