We experimentally test Dufwenberg and Kirchsteiger’s (2004) theory of sequential reciprocity in a sequential prisoner’s dilemma (SPD) and a mini-ultimatum game (MUG). Data on subjects’ behavior and firstand second-order beliefs allow us to classify their behavior as a material best...

Regulators have recently shown an increased sensitivity to the issue of price squeezes, especially telecom regulators in European countries. This paper analyzes the relevance and the scope of price squeeze tests as proposed by practitioners and economists, taking the existing regulatory...

There is much debate on how the flow of information between firms should be organized, and whether existing privacy laws should be amended. We offer a welfare comparison of the three main current policies towards consumer privacy .anonymity, opt in, and opt out .within a two-period model of...

Many firms and organizations compete for customers while at the same time receiving substantial funding from outside sources, such as government subsidies. In this paper, we study the effects of two commonly observed, alternative subsidy systems on the behavior of price-competing firms....

The evolution of broadband penetration has shown substantial differences between OECD countries. This paper empirically investigates to what extent different forms of regulated competition explain these international differences. Three modes of competition are distinguished between broadband...

Intermittent power sources enable firms to reduce costs by horizontally subcontracting generation. Dispatchable units serve as a strategic device, even when never used, since their availability credibly limits the price paid for subcontracting. Security of supply measures motivated by too low...

We study the competitive and welfare consequences when only one firm must commit to uniform pricing while the competitor's pricing policy is left unconstrained. The asymmetric no-discrimination constraint prohibits both behaviour-based price discrimination within the competitive segment and...

A proportional decrease in switching costs increases competition and social welfare. However, a lump sum decrease in switching costs softens competition and does not invariably increase social welfare.

This paper studies job raiding and its effect on incentives to invest in human capital. A firm can offer more attractive wages to new hires than to its current employees, thereby raiding a rival’s workers. Our model shows that firms prefer to raid in equilibrium when given the opportunity to...

We experimentally investigate inter-ethnic trust and reciprocity by letting subjects from distinct ethnic origins play the trust game (Berg, Dickhaut, and McCabe, 1995). The participants in the experiment are male small business entrepreneurs of Turkish or Belgian ethnic origin, all of whom have...