A partly analytical, partly computational approach is used to study mixed strategy equilibria of Hotelling's model of sp atial competition in which each of two firms chooses a location in a line segment and a price. There is a unique (up to symmetry) subgame perfect equilibrium in which the...

The authors study interactive situations in which players are boundedly rational. Each player, rather than optimizing given a belief about the other players' behavior, as in the theory of Nash equilibrium, uses the following choice procedure. She first associates one consequence with each of her...

The authors develop a model of electoral competition in which citizens choose whether or not to run as candidates. A winner implements her favorite policy. The equilibrium number of candidates depends negatively on the cost of running and positively on the benefits of winning. For some parameter...

A model of a collusive duopoly in which each firm has limited capacity is studied. The negotiated output quotas depend on the bargaining power of the firms, which derives from the damage the firms can do by cutting prices. For fixed capacities, the unit profit of the small firm is at least as...

Using a partly analytical, partly computational approach we find and study a mixed strategy equilibrium in Hotelling's model of spatial competition (in which each of two firms chooses a location in a line segment, and a price). In the equilibrium we find, the firms randomize only over prices....