This paper introduces a new normal form rationalizability concept, which in reduced normal form games corresponding to generic finite extensive games of perfect information yields the unique backward induction outcome. The basic assumption is that every player trembles "more or less rationally"...

This paper examines strategic trade policy with unilateral intervention under asymmetric information about market demand. In an international Cournot-duopoly, the choice of the domestic country's export subsidy signals the domestic country's private information to the foreign firm. It is shown...

The Sharpe ratio is adequate for evaluating investment funds when the returns of those funds are normally distributed and the investor intends to place all his risky assets into just one investment fund. Hedge fund returns differ significantly from a normal distribution. For this reason, other...

It is known that the Cournot model of quantity competition has to be interpreted as the reduced form of a more complex situation, in which firms can commit to capacity levels prior to setting prices. I show that the optimal strategic debt choice of capacity-price competitors depend on the type...

Brander and Lewis argue in a seminal paper (AER, 1986) that a firm's debt-equity ratio should have important strategic effects on product market competition. We test their model in a duopoly experiment under both, Bertrand and Cournot competition. We find that leverage has strategic effects, but...

In this paper, we investigate the German stock market with regard to quot;negative stub valuesquot; or quot;parent company puzzles.quot; These are situations where a firm's market value is less than the value of its ownership stake in a publicly traded subsidiary. According to...

In this paper we prove that partial-moments-based performance measures (e.g., Omega, Kappa, upside-potential ratio, Sortino–Satchell ratio, Farinelli–Tibiletti ratio), value-at-risk-based performance measures (e.g., VaR ratio, CVaR ratio, Rachev ratio, generalized Rachev ratio), and other...