We analyse optimal penal codes in both Bertrand and Cournot supergames with product differentiation. We prove that the relationship between optimal punishments and the security level (individually rational discounted profit stream) depends critically on the degree of supermodularity in the stage...

We explore the hold-up problem when trading parties can make specific investments simultaneously or sequentially. As previously emphasized in the literature, sequencing of investments can allow some projects to proceed that would not be feasible with a simultaneous regime. This is not always the...

We consider repeated interaction among several producers of a homogeneous, divisible good, traded at a common market. Demand is uncertain, and its law is unknown.

This paper examines an Outside Option Game Designed to study the tension between maximizing the size of the surplus and bargaining over the division of thus surplus among those who contributed to its creation.

We show that a strategy profile of a normal form game is proper if and only if it is quasi-perfect in every extensive form (with that normal form). Thus, properness requires optimality along a sequence of supporting trembles, while sequentiality only requires optimality in the limit.