In an article published in this journal, Rapoport and Amaldoss (2000, Journal of Economic Behavior and Organization, 42, 483-521) analyze symmetric and asymmetric investment games similar to two-player all-pay auctions with bid caps. In this note, we correct an error in their characterization of...

Countries compete for new FDI investment, whereas stocks of FDI generate agglomeration benefits and are potentially subject to extortionary taxation. We study the interaction between these aspects in a simple vintage capital framework with discrete time and an infinite horizon, focussing on...

This paper contributes to the study of tacit collusion by analyzing infinitely reaped multiunit uniform price auctions in a symmetric oligopoly with capacity constrained firms. Under both the Market Clearing and Maximum Accepted Price rules of determining the uniform price, we show that when...

In this note, we characterize the full set of Equilibria of the 2-firm patent race analyzed by Amaldoss and Jain (Management Science, 48(8), August 2002, pp. 972-991). Contrary to Amaldoss and Jain’s (2002) claim, we show that the equilibrium is not always unique and that the set of Equilibria...

The formation of an alliance in conflict situations is known to suffer from a collective action problem and from the potential of internal conflict. We show that budget constraints of an intermediate size can overcome this strong disadvantage and explain the formation of alliances.

This paper characterizes the set of Nash equilibria in a price setting duopoly in which firms have limited capacity, and in which unit costs of production up to capacity may differ. Assuming concave revenue and efficient rationing, we show that the case of different unit costs involves a...

We examine whether sharp debt increases through leveraged buyouts and recapitalizations interact with market structure to influence plant closing and investment decisions of recapitalizing firms and their rivals. We take into account the fact that recapitalizations and investment decisions are...

With few exceptions, the literature on the role of capacity as a strategic entry deterrent has assumed Cournot competition in the post-entry game. In contrast, this paper studies a model in which the incumbent and entrant sequentially precommit to capacity levels before competing in price....

This paper presents a simple model of sequential wage setting by two unions, each of which is attached to a firm in a duopolistic output market. The authors find that, for a large range of unanticipated downward demand shocks, the equilibrium exhibits downward wage rigidity. Neither union...