When avoidable fixed costs are introduced into the entry model of Dixit (1980) and Ware (1984), there arises a coordination problem in selecting among post-entry Nash equilibria. Elimination of weakly dominated strategies allows the entrant to use a market-capturing strategy, consisting of a...

A model of directed search with a finite number of buyers and sellers is considered, where sellers compete in direct mechanisms. Buyer heterogeneity and Nash equilibrium results in perfect sorting. The restriction to complementary inputs, that the match value function Q is supermodular, in...

I examine a game-theoretical model of two variants of double-elimination tournaments, and derive the equilibrium behavior of symmetric players and the optimal prize allocation assuming a designer aims to maximize total effort. I compare these theoretical properties to the well-known...

The housing rental market offers a unique laboratory for studying price stickiness. This paper is motivated by two facts: 1. Tenants' rents are remarkably sticky even though regular and expected recontracting would, by itself, suggest substantial rent flexibility. 2. Rent stickiness varies...

Costly competitions between economic agents are modeled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants' efforts are significantly higher than predicted by the standard...

Various approaches used in Agent-based Computational Economics (ACE) to model endogenously determined interactions between agents are discussed. This concerns models in which agents not only (learn how to) play some (market or other) game, but also (learn to) decide with whom to do that (or not).

The gold spot price is fixed by four banks every day at 10:30 am and 3 pm London time. This document describes a role-play simulation that replicates core features of the London gold fixing with the aim to better understand the incentives and the behaviour of the fixing participants. The game is...

We develop a method to estimate a game’s primitives in complex dynamic environments. Because of the environment’s complexity, agents may not know or understand some key features of their interaction. Instead of equilibrium assumptions, we impose an asymptotic ε-regret (ε-AR) condition on...

We report an experimental test of alternative rules in innovation contests when success may not be feasible and contestants may learn from each other. Following Halac et al. (forthcoming), the contest designer can vary the prize allocation rule from Winner-Take-All in which the first successful...

We will call a game a reachable (pure strategy) equilibria game if starting from any strategy by any player, by a sequence of best-response moves we are able to reach a (pure strategy) equilibrium. We give a characterization of all finite strategy space duopolies with reachable equilibria. We...