Research on collusion in vertically differentiated markets is conducted under one or two potentially restrictive assumptions. Either there is a single industry-wide cartel or costs are assumed to be independent of quality or quantity. We explore the extent to which these assumptions are indeed...

The thesis of this paper is mathematical formulation of the laws of Economics with application of the principle of Least Action of classical mechanics. This paper is proposed as the rigorous mathematical approach to Economics provided by the fundamental principle of the physical science – the...

We provide the theoretical foundations for a new estimation algorithm that non-parametrically infers level-k beliefs from laboratory choices in generalized guessing games with heterogeneous interactions. The algorithm takes the strategic dependencies of the game and subjects' choices as an input...

Using a laboratory experiment, we examine whether informal monetary sanctions can lead to better coordination in a repeated minimum effort coordination game. While most groups first experience inefficient coordination, the efficiency increases substantially after introducing an ex post...

In diesem Beitrag geht es um subjektive Gerechtigkeitsvorstellungen, nicht Gerechtigkeit an sich, da erstere im Gegensatz zu letzterer empirisch feststellbar und handlungswirksam sind. Allerdings müssen ihre Folgen nicht nur gute sein. Gerechtigkeitsvorstellungen können erstens die...

This paper asks whether population growth is conducive to the sustainability of cooperation. A simple model is developed in which farmers who live around a circular lake engage in trade with their adjacent neighbors. The payoffs from this activity are governed by a prisoner's dilemma rule of...

We provide the theoretical foundations for a new estimation algorithm that non-parametrically infers level-k beliefs from laboratory choices in generalized guessing games with heterogeneous interactions. The algorithm takes the strategic dependencies of the game and subjects' choices as an input...

We study stable behavior when players are randomly matched to play a game, and before the game begins each player may observe how his partner behaved in a few interactions in the past. We present a novel modeling approach and we show that strict Nash equilibria are always stable in such...

We study environments in which agents are randomly matched to play a game, and before the interaction begins each agent observes a limited amount of information about the partner's aggregate behavior. We develop a novel modeling approach for such environments and apply it to study the Prisoner's...

We study environments in which agents are randomly matched to play a Prisoner's Dilemma, and each player observes a few of the partner's past actions against previous opponents. We depart from the existing literature in two key respects: (1) we allow a small fraction of the population to be...