This paper applies recent advances in the theory of learning to the analysis of consumer behaviour in a dynamic duopoly. Nash equilibrium play is characterised when consumers learn adaptively about the relative quality of the two products. A constrast is made between belief-based and...

We present a 2 bidder multi-unit, common cost auction model with uncertain demand and capacity constraints which ensure that the participants sometimes face a residual market share. The model is motivated by electricity pools. We show that a single-price auction where the bidders can submit only...

In his essay on public credit, Hume advances two arguments in favour of government borrowing and five against. It is interesting to cast his various arguments and claims in terms of modern models, or their variants, to see how they might be formalized - and thus potentially supported, or...

Technical progress lowers costs and prices but appears to have an ambiguous effect on product reliabilty. This paper presents a simple model which explains this observation.

I prove that as long as we allow the marginal utility for money lamda to vary between purchases (similarly to the budget) then the quasi-linear and the ordinal budget-constrained models rationalize the same data. However, we know that lamda is approximately constant. I provide a simple...

In many decentralised markets, the traders who benefit most from an exchange do not employ intermediaries even though they can easily afford them. For other traders, those who benefit little from trade, intermediaries are too expensive. Together, these observations lead to empirically observed...

The human tendency to cooperate with nonkin even in short-run relationships remains a puzzle. Recently it has been hypothesized that altruism may be a byproduct of “mentalizing”, the process of understanding and predicting the mental states of others. Another idea is based on sexual...

We propose an elementary theory of wars fought by fully rational contenders. Two parties play a Markov game that combines stages of bargaining with stages where one side has the ability to impose surrender on the other. Under uncertainty and incomplete information, in the unique equilibrium of...