Traditional game theory usually relies on commonly known decision rationality meaning that choices are made in view of their consequences (the shadow of the future). Evolutionary game theory, however, denies any cognitive deliberation by assuming that choice behavior evolves due to its past...

Based on a stochastic dynamic model of a firm’s optimal innovativebehavior we derive a simultaneous equation system for product andprocess innovations with intertemporal spillover effects. We estimatevarious versions of the model with dichotomous innovation data at thefirm level by using a...

The paper presents a dynamic general-equilibrium model of education, quality and variety innovation, and scale-invariant growth. We consider endogenous human-capital accumulation in an educational sector and quality and variety innovation in two separate R&D sectors. In the balanced growth...

We study strategic interfirm competition allowing for internal conflicts in each seller firm. Intrafirm conflicts are captured by a multi-agent framework with principals implementing a revenue sharing scheme. For a given number of agents, interfirm competition leads to a higher revenue share for...

As is well-known from the literature on oligopolistic competition with incomplete information, firms have an incentive to share private demand information. However, by assuming verifiability of demand data, these models ignore the possibility of strategic misinformation. We show that if firms...

In his basic model of debt renegotiation, BESTER [1994] argues that collateral is more effective if high risk projects are financed. This result, however, crucially depends on the definition of risk. Using the second-order stochastic dominance criterion introduced by ROTHSCHILD AND STIGLITZ...

nnovative behavior is mostly studied theoretically, e.g., in models of patent races, and empirically, e.g., by using R&D or patent data. This research, however, is only poorly informed about the psychological tradition of creativity research. Our study is an attempt to experimentally collect...

We study interfirm price competition in the presence of horizontal and vertical intrafirm conflicts in each firm. Intrafirm conflicts are captured by a principal-agent framework with firms employing more than one agent and implementing a tournament incentive scheme. The principals offer premium...

In two-person generosity games, the proposer’s agreement payoff is exogenously given, whereas that of the responder is endogenously determined by the proposer’s choice of the pie size. In three-person generosity games, equal agreement payoffs for two of the players are either exogenously...

In generosity games, one agreement payoff is exogenously given, whereas the other is endogenously determined by the proposer's choice of the "pie" size. This has been shown to induce pie choices which are either efficiency or equality seeking. In our experiment, before playing the generosity...