In this article, we consider how important developments in game theory have contributed to the theory of industrial organization.

By its very nature, advertising is a prominent feature of economic life. Advertising reaches consumers through their TV sets, radios, newspapers, magazines, mailboxes, computers and more. Not surprisingly, the associated advertising expenditures can be huge. For example, Advertising Age (2005)...

The WTO dispute settlement system represents a major achievement of the Uruguay Round. By most accounts, this system has worked very well. In the ongoing dispute settlement understanding (DSU) review, WTO Members are considering proposals that might lead to further improvements in the...

A major accomplishment of the Uruguay Round of GATT negotiations in creating the World Trade Organization (WTO) was the introduction of new dispute settlement procedures. These procedures were intended to provide a significant step forward, relative to GATT, in the settling of trade disputes, in...

Trade negotiations occur through time and between the governments of many countries. An important issue is thus whether the value of concessions that a government wins in a current negotiation may be eroded in a future bilateral negotiation to which it is not party. We identify rules of...

In this paper, we present research that speaks to the purpose and design of GATT. The paper proceeds in three basic steps. We first discuss the major theoretical approaches to the study of trade agreements. Next, we develop the institutional context for our study with a description of the...

What do trade negotiators negotiate about? There are two distinct theoretical approaches in the economics literature that offer an answer to this question: the terms-of-trade theory and the commitment theory. The terms of-trade theory holds that trade agreements are useful to governments as a...

This paper considers a long-standing question in the field of Industrial Organization: Can an incumbent firm price and advertise so as to deter entry that otherwise would be profitable? For the most part, the first economists to consider this question give affirmative answers. Braithwaite (1928)...

We study trust, reciprocity and favors in a repeated trust game with private information. In our main analysis, players are willing to exhibit trust and thereby facilitate cooperative gains only if such behavior is regarded as a favor that must be reciprocated, either immediately or in the...

We provide a first formal analysis of the international rules that govern the use of subsidies to domestic production. Our analysis highlights the impact of the new disciplines on subsidies that were added to GATT rules with the creation of the WTO. Our results suggest that, although GATT...