This article develops a dynamic model of nonprice competition in an oligopolistic industry and uses it to analyze advertising competition in the U.S. cigarette industry. The model generalizes existing studies by allowing advertising to affect both firm market shares and the total size of the...

Book review

This article studies auctions in which several sellers compete for the right to sell to a market characterized by a negatively sloped demand curve. In this environment the quantity traded becomes endogenous; this effect leads to three results concerning the outcomes of open versus (first-price)...

We analyze money-back contracts, in which a seller promises to refund some fraction of the buyer's purchase price if an item is returned, as a three-stage game. In a cooperative first stage the players determine a price and refund share. In the second stage they noncooperatively choose inputs....

This article demonstrates that the dispute between Texaco and Pennzoil over the Getty Oil takeover reduced the combined wealth of the claimants on the two companies by over $3 billion. During the course of the litigation, Pennzoil's shareholders gained only one-sixth as much as Texaco's...

We consider the design of regulatory policy when the regulator is imperfectly informed about both the firm's cost function and the demand function it faces. To some extent the optimal policy here is the natural "combination" of the optimal policies when there is uncertainty only about either...

Using an extension of Ghemawat and Nalebuff's (1985) model, I analyze the outcome of industry decline when firms have multiplant operations. The analysis reveals that no natural generalization of their strong empirical prediction, that the larger of two single-plant duopolists exits first, holds...

This article presents an experimental study of bidding behavior in sequential auctions in which there are budget constraints and perfect information. Our experiments test both the properties of such auctions and the predictive power of a refinement of the Nash equilibrium concept. We find that...

This article considers a two-period model of natural monopoly and second-sourcing. The incumbent supplier invests in the first period. After observing the incumbent's first-period performance, the buyer may break out in the second period. The investment may or may not be transferable to the...

This article reviews the recent literature on regulation under asymmetric information. We first develop the conceptual framework and offer a reminder of the techniques used in the field. Then we apply the framework and techniques to a variety of situations -- with or without commitment. We...