A recent advance in our understanding of repeated PDs is the detection of a threshold d* at which laboratory subjects start to cooperate predictively. This threshold is substantially above the classic threshold "existence of Grim equilibrium" and has been characterized axiomatically by Blonski,...

This paper considers a two-stage oligopoly model with downstream retailers and two types of transaction costs (in contracting retailers and in direct retailing). Our analysis shows how transaction costs affect vertical integration in a strategic model of oligopoly, and it relates transaction...

This paper analyzes a T-stage model of oligopoly where firms build up capacity and conclude forward sales in stages tT, and they choose production quantities in t=T. We consider the case of n firms with asymmetric marginal costs. In the two-stage game, the set of outcomes is a...

In many industries, firms pre-order input and forward sell output prior to the actual production period. It is known that forward buying input induces a “Cournot–Stackelberg endogeneity” (both Cournot and Stackelberg outcomes may result in equilibrium) and forward selling output induces a...

The possibility of forward trading has been shown to restore social efficiency in Cournot oligopolies if marginal costs are constant. The paper analyzes the more general case that marginal costs are non-decreasing. I show that increasing marginal costs diminish the “strategic...

If Cournot oligopolists may sell their output prior to its production (forward trading), competition intensifies. Potentially, it may intensify so far as to imply convergence to the Bertrand equilibrium, as shown by Allaz and Vila (1993) for the case of linear demand and costs. The present paper...

Spectrum auctions are multiple-unit auctions where the objects auctioned are not necessarily identical. It is shown that the requirement of independent bids in such auction can prevent the existence of pure strategy equilibria (which implies inefficiency). Thus, we suggest that spectrum auctions...

This paper presents an experimental study of dynamic indefinite horizon R&D races with uncertainty and multiple prizes. The theoretical predictions are highly sensitive: small parameter changes determine whether technological competition is sustained, or converges into a market structure with an...

We show and explain how generosity beyond that explainable by social preferences can manifest in bargaining. We analyze an ultimata game with two parties vying to coalesce with a randomly chosen proposer. They simultaneously demand shares of the surplus. The proposer must then make an offer that...

This paper presents an experimental study of dynamic indefinite horizon R&D races with uncertainty and multiple prizes. The theoretical predictions are highly sensitive: small parameter changes determine whether technological competition is sustained, or converges into a market structure with an...