Firms communicate product quality to consumers through a variety of channels. Economic models of such communication take two alternative forms when quality is exogenous: (i) disclosure of quality through a credible direct claim; or (ii) signalling of quality via producer actions that...

We examine the interplay of imperfect competition and incomplete information in the context of price competition among firms producing horizontally and vertically differentiated substitute products. Incomplete information about vertical quality (consumer satisfaction) signalled via price softens...

Most-favored-nation (MFN) clauses have been used to address a repeat player's time-inconsistency problem in international trade, durable-goods monopoly pricing, franchise contracting, and settlement bargaining. We argue that a nonrepeat player (an early-bargaining plaintiff) can use an MFN to...

We provide a simple incomplete-information model wherein an initially uninformed plaintiff makes a menu of settlement demands (one of which involves confidentiality) of the informed defendant. The defendant is informed about both his culpability in the harm suffered by the current plaintiff and...

Strategic variables (such as availability) can be used to increase customers' search costs, thus increasing the price that can be supported in equilibrium. Customers can "purchase" bargaining power by shopping at two firms and then bringing those firms into competition with one another. Knowing...

We model the settlement and litigation process, allowing for incomplete information about the level of damages on the part of both the defendant and the court, and use the model to examine the effect of making (currently inadmissible) settlement demands admissible as evidence in court should a...

In search models, the property of "recall" has heretofore been treated as exogenous, with a distinction made between models with "no recall" and models with "perfect recall." However, an alternative interpretation is that recall is provided by the firms. Then, "perfect recall" corresponds to...

This article uses an infinite-regress model of firm-level decisions to find a rational expectations equilibrium for a duopoly and to relate concepts of conjectural variations and consistency to the Cournot equilibrium. The model derives a conjectural variation instead of assuming it. In...