We investigate a dynamic advertising model where product quality is endogenous. In the differential game between single-product firms, there exists a parameter range where the low-quality firm uses a more efficient advertising technology and earns higher profits than the rival. Moreover, we show...

In this paper we propose a simple, intuitive approach to asset valuation in terms of marginal contributions to the characteristics (moments) of the market portfolio. Considering only the first two moments, mean and variance, the valuation equation is shown to correspond to Sharpe's CAPM. A...

We investigate a dynamic Cournot duopoly with intraindustry trade, where firms invest in R&D to reduce the level of iceberg transportation costs. We adopt both open-loop and closed-loop equilibrium concepts, showing that a unique (saddle point) steady state exists in both cases. In the open-loop...

We investigate a differential duopoly game where each firm, through capital accumulation over time, may invest both in persuasive advertising campaigns aimed at increasing the willingness to pay of consumers and in an R&D process aimed at increasing the level of own product quality. In contrast...

We study the strategic interaction between two firms competing in quantites which decide whether exporting into each other market. The product is homogeneous and production entails constant returns to scale. Scope effects are present. By dealing with two types of trade costs, namely per unit and...

We investigate a dynamic Cournot duopoly with intraindustry trade, where firms invest in R&D to reduce the level of iceberg transportation costs. We adopt both open-loop and closed-loop equilibrium concepts, showing that a unique (saddle point) steady state exists in both cases. In the open-loop...

The seminal paper by Abreu (1986) is revisited to reassess the optimality of one-shot stick-and-carrot punishments. It is shown that there are admissible conditions under which the use of grim trigger strategies with an infinite Nash reversion is more efficient than implementing Abreu’s penal...