contracts which determine their managers' salaries. One contract simply gives managers incentives to maximize firm profits …, while the second contract gives an additional sales bonus. Although theory predicts the second contract to be chosen, it is … only rarely chosen in the experimental markets. This behavior is rational given that managers do not play according to the …

The theory of industrial organization has experienced an impressive boom by using the methods of (non-cooperative) game … theory. The conclusions depend, however. crucially on subtle details of the market decision processes about which there exist …

leadership. Our data, however, does not confirm the theory. While Stackelberg equilibria are extremely rare we often observe …

, just as predicted by the theory, whereas average follower prices are not above average prices in the simultaneous market … simultaneous-move markets whereas first movers do not. As in theory, there is a significant first-mover disadvantage when firms …