We examine a Stackelberg game where a financially constrainedleader faces competition from a ‘deep pocket’ follower. We analyzethe consequences of this trade-off between a financial and a strategicadvantage for both the design of financial contracts and market structure.We derive conditions...

This paper shows that the possibility of licensing can significantly alter theeffects of entry on social welfare. We find that while licensing with output royaltyalways raises welfare due to entry, licensing with up-front fixed-fee reduces thepossibility of lower welfare compared to a situation...

Noncooperative games in which each player’s payo¤ function depends on anadditively separable function of every player’s choice variable may be transformedinto an aggregative game, which may be analysed using the conceptof ‘share functions’. The resulting approach avoids the...

We investigate the Nash equilibria of asymmetric, winner-take-all, imperfectlydiscriminating contests, focussing on existence, uniqueness and rentdissipation. When the contest success function is determined by a productionfunction with decreasing returns for each contestant, equilibria...

The rent-seeking model of Tullock (1980) has stimulated a large literature on rent-seekingcontests, of which Hillman (1989) and Nitzan (1994) provide useful surveys. AlthoughTullock's 'winner take all' model has been adapted and extended in numerous ways, thereremain fundamental modeling issues,...