The presumed connection between causal ambiguity and sustained, capabilities-based performance advantages is well-known to strategy researchers. This paper presents the first formal examination of this connection. I provide a precise distinction between the intrinsic, or potential, level of...

Two asymmetric potential entrants contemplate entering a new market. Firms differ in their potential profit flows and investment sunk costs. The market demand follows a geometric Brownian motion. This paper shows that under certain parameter conditions, there will be an equilibrium triggered by...

In this paper we consider how the degree of risk aversion, and demand/cost uncertainty, influence competition on oligopolistic markets. Under demand uncertainty, the best response strategies (both quantities and prices) are decreasing in risk aversion, but for cost uncertainty, quantities are...

This paper extends Hall's (1988) methodology to analyse imperfections in both the product and the labour market for firms in the Belgian manufacturing industry over the period 1988- 1995. We investigate the heterogeneity in price-cost mark-up and workers' bargaining power parameters among 18...

Vega-Redondo (1997) showed that imitation leads to the Walrasian outcome in Cournot Oligopoly. We generalize his result to aggregative quasi-submodular games. Examples are the Cournot Oligopoly, Bertrand games with differentiated complementary products, Common- Pool Resource games, Rent-Seeking...

In the economic literature on market competition, firms are often modeled as single decision makers and the internal organization of the firm is neglected (unitary player assumption). However, as the literature on strategic delegation suggests, one can not generally expect that the behavior of...

In this paper, we consider the market for video games, where some firms are active in both, the market for video games hardware and software. It is puzzling that hardware can be easily made compatible with duplicated (i.e. pirated) software. We ask, whether there exist strategic reasons...

In this paper, the market for video games is considered, where some firms produce both, hardware and software. It is analyzed, whether these firms are interested in strategically enabling software piracy. It will be shown that this is indeed the case, if firms differ substantially in hardware...

We analyze a symmetric n-firm Cournot oligopoly with a heterogeneous population of optimizers and imitators. Imitators mimic the output decision of the most successful firms of the previous round a la Vega-Redondo (1997). Optimizers play a myopic best response to the opponents' previous output....

This paper studies cross-sectional heterogeneity in price-cost margins and the extent of rent sharing among 48 sectors and 10738 (mainly manufacturing) firms in France. At the sectoral level, the average price-cost mark-up and the average extent of rent sharing amount to 1.701 and 0.368...