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The Dixit (1980) hypothesis that incumbents use investment in capacity to deter potential entrants has found little empirical support. Bagwell and Ramey (1996) propose a model where, in the unique game-theoretic prediction based on forward induction or iterated elimination of weakly-dominated...
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theory of economic voting has achieved near axiomatic status. Yet the microfoundations of economic voting are not entirely … clear. Quattrone and Tversky (1988) posit that prospect theory can explain economic-political correspondences - suggesting … result not predicted by prospect theory. Findings may imply the importance of politicization of economic conditions …
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We run a market experiment where firms can choose not only their price but also whether to present comparable offers. They are faced with artificial demand from consumers who make mistakes when assessing the net value of products on the market. If some offers are comparable however, some...
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