This paper studies a novel model of persuasive advertising over differentiated products in a duopoly. Each firm tries to increase the weight that the consumers attach to the dominant attribute of its product in which it has an advantage and consequently shift the attention of consumers from...

A standard result of firm theory is that a monopoly maximizes profit somewhere along the elastic portion of its demand curve. However, empirical studies of sports ticket pricing routinely find that (home) teams price along the inelastic portion of demand. Despite compelling theoretical...

Brazil, Chile and other developing countries have recently experienced with forward or long-run contract auctions for electricity demand, to meet supply adequacy problems. In this paper, we analyze what it requires to have a competitive auction process for this type of contracts when each bidder...

In this note we use a static game model to analyze the optimal cleanup of an apartment that is shared by two college students. Both students dislike cleaning. However, they also prefer a clean apartment to a dirty one. Student i 's utility function embodies the idea that the more time one...

This paper presents an overlapping generations model to explain why humans live in families rather than in other pair groupings. Since most non-human species are not familial, something special must be behind the family. It is shown that the two necessary features that explain the origin of the...

Substantial evidence has accumulated in recent empirical works on the limited ability of the Nash equilibrium to rationalize observed behavior in many classes of games played by experimental subjects. This realization has led to several attempts aimed at finding tractable equilibrium concepts...

We consider a mechanism design setting in which agents can acquire costly information on their preferences as well as others'. The choice of the mechanism generates informational incentives as it affects what information is acquired before play begins. A mechanism is informationally simple if...

By its critics, the rational choice model is routinely accused of being unrealistic. One key objection has it that, for all nontrivial problems, calculating the best response is cognitively way too taxing, given the severe cognitive limitations of the human mind. If one confines the analysis to...

In this note we use a simple game model to analyze the optimal cleanup of an apartment that is shared by n ∈ ℕ college students who are pressed for time. From an individual standpoint, these students dislike cleaning. However, they also prefer a clean apartment to a dirty one. Hence, for any...

Extending the equilibrium concepts of Kőszegi and Rabin (2006, 2007), this paper analyzes the strategic interaction of expectation-based loss-averse players. For loss-averse players with choice-acclimating expectations the utility from playing a mixed strategy is not linear but convex in the...