I study a budget-constrained, private-valuation, sealed-bid sequential auction with two incompletely-informed, risk-neutral bidders in which the valuations and income may be non-monotonic functions of a bidder's type. Multiple equilibrium symmetric bidding functions may exist that differ in...

If a worker's output is observed by the market only when the worker invests in self-promoting activities, then workers overinvest in self-promotion. The efficient contract is one in which firms (i) offer to match outside offers strategically and (ii) guarantee a minimum wage. The model predicts...

The seminal papers of Vincent P. Crawford and Joel Sobel (1982) and Jerry Green and Nancy Stokey (1980) study models in which a signal about the state of the world is transmitted from a perfectly informed sender to an uninformed receiver. The authors study a model in which multiple signalers...

A model of a collusive duopoly in which each firm has limited capacity is studied. The negotiated output quotas depend on the bargaining power of the firms, which derives from the damage the firms can do by cutting prices. For fixed capacities, the unit profit of the small firm is at least as...

A partly analytical, partly computational approach is used to study mixed strategy equilibria of Hotelling's model of sp atial competition in which each of two firms chooses a location in a line segment and a price. There is a unique (up to symmetry) subgame perfect equilibrium in which the...

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...

The author identifies circumstances in which an agent makes a costly, unobservable, irreversible investment that affects the subsequent noisy economic environment. Rivals infer that the agent is strong, even though it initially appeared weak, if enough 'strength' is seen subsequently....