This paper develops the idea of forward induction in the context of increasing returns. The situation is modeled as a game of entry with a fixed cost and no marginal cost. The recursive equations that provide the solution of the infinitely repeated game are determined and solved for various cost...

This article takes the following question as a point of departure: if one firm is more efficient than a rival does it have cause to initiate a price war? In order to study the question, we rely on a simple duopoly model and try to make especially heavy use of the concept of barrier to mobility....

This paper provides a game theoritic rationale for the use of standards of behavior in hierarchies. lt proves that the common knowledge of such standards in a long term relationship generates tacit cooperation as long as the time horizon is far enough and that intermediary observations are...