This paper analyzes the optimality of package bundling by focusing on the ?main and accessory?relationship between two goods. In particular, we consider option package bundling in which an optional good is valuable only if it is consumed together with a certain (nonoptional) base good. We...

This paper studies the effects of Knightian uncertainty, or ambiguity, on entrepreneurial choice. By distinguishing between risk and ambiguity, we first show that ambiguity aversion makes it less likely that an individual will become an entrepreneur. It is also shown that an increase in...

This paper examines the issue of model selection in studies of strategic situations. In particular, we compare estimation results from Adachi and Watanabe's (2008) noncooperative formulation of government formulation with those from two alternative cooperative formulations. Although the...

This paper studies the welfare effects of third-degree price discrimination under oligopolistic competition with horizontal product differentiation. We derive a necessary and sufficient condition for price discrimination to improve social welfare: the degree of substitution must be sufficiently...

This note examines the endogenous determination of participation costs in a costly voting game with complete information when there are three voters. I Â…find that there are two types of equilibria: (1) one where a voter who has a minority opinion definitely abstains, and (2) where he or she...

This study investigates the effects of monopolistic third-degree price discrimination on market opening in the presence of consumption externalities between separate markets. Assuming symmetric interdependent linear demands and constant marginal cost, we indicate the possibility that with...