In an experiment, a group of strangers was randomly divided in pairs to play a prisoners’ dilemma; this process was indefinitely repeated. Cooperation did not increase when subjects could send public messages amounting to binding promises of future play.

We study the individual behavior of students and workers in an experiment where they repeatedly face the same cooperative task. The data show that clerical workers differ from college students in overall cooperation rates, strategy adoption and use of punishment opportunities. Students cooperate...

We study cooperation in economies of indefinite duration. Participants faced a sequence of prisonerʼs dilemmas with anonymous opponents. We identify and characterize the strategies employed at the individual level. We report that (i) grim trigger does not describe well individual play and there...

We study a decentralized trading model as in Peters (1984a), where heterogeneous market participants face a trade-off between price and trade probability. We present a novel proof of existence of a unique demand vector in Nash equilibrium, based on a recursive approach that exploits the...

This paper considers a two-stage oligopoly model with downstream retailers and two types of transaction costs (in contracting retailers and in direct retailing). Our analysis shows how transaction costs affect vertical integration in a strategic model of oligopoly, and it relates transaction...

What institutions can sustain cooperation in groups of strangers? Here we study the role of monetary systems. In an experiment, subjects sometimes needed help and sometimes could incur a cost to help an anonymous counterpart. In the absence of money, the intertemporal exchange of help, which...

In many industries, firms pre-order input and forward sell output prior to the actual production period. It is known that forward buying input induces a “Cournot–Stackelberg endogeneity” (both Cournot and Stackelberg outcomes may result in equilibrium) and forward selling output induces a...

The possibility of forward trading has been shown to restore social efficiency in Cournot oligopolies if marginal costs are constant. The paper analyzes the more general case that marginal costs are non-decreasing. I show that increasing marginal costs diminish the “strategic...