The classical price competition model (named after Bertrand) prescribes that in equilibrium prices are equal to marginal costs. Moreover, prices do not depend on the number of competitors. Since this outcome is not in line with real-life observations, it is known as the "Bertrand Paradox". Many...

This paper presents an empirical study of spatial competition and a methodological approach to estimating product characteristics and consumer preferences in industries with products whose characteristics are unobservable or difficult to measure.We demonstrate the effective use of panel data on...

We develop an equilibrium model of industrial structure in which the organization of firms is endogenous. Differentiated consumer products can be produced either by vertically integrated firms or by pairs of specialized companies. Production of each variety of consumer good requires a unique,...

We ask whether Israeli banks lost market power as a consequence of financial liberalization, despite the fact that the banking industry remained highly concentrated. We estimate a "monopoly power" conduct parameter and a "monopsony power" conducte parameter, jointly, for the non-indexed local...

If the allocations of a differential information economy are defined as incentive compatible state -contingent lotteries over consumption goods, competitive equilibrium allocations exist and belong to the (ex-ante incentive) core. Furthermore, any competitive equilibria allocation can be viewed...

Successful individuals were frequently found to be overly optimistic. These finding are puzzling, as one could expect that realists would perform best in the long run. We show, however, that in a large class of strategic interactions of either cooperation or competition, the equilibrium payoffs...

We study the electoral competition between two parties vying for seats in a legislature. The electorate includes knowledgeable voters and impressionable voters, the later susceptible to electioneering activities.

This paper presents an empirical study of spatial competition and a methodological approach to estimating product characteristics and consumer preferences in industries with products whose characteristics are unobservable or difficult to measure.We demonstrate the effective use of panel data on...

We propose an Equilibrium concept, called Undercut-Proof equilibrium, for price competition between firms producing differentiated brands.