Perfect equilibria of finitely repeated games may be vulnerable to the possibility of renegotiation among players. The authors study the limiting properties of the set of payoffs from equilibria that are immune to renegotiation. Their main result is th at the limit of the set of payoffs from...

The authors study a dynamic model of duopoly in which firms choose both prices and quantities. If quantity (capacity) choices are relatively inflexible , firms generally carry excess (idle) capacity in equilibrium. Because of this enforcement cost, firms are unable to achieve monopoly levels....

We offer a selective survey of the uses of cooperative and non-cooperative game theory in the analysis of legal rules and institutions. In so doing, we illustrate some of the ways in which law influences behavior, analyze the mechanism design aspect of legal rules and institutions, and examine...

Understanding the impact of legal protection on investment is of major importance. This paper provides a framework for addressing this issue, and shows that investment may actually be higher in the absence of legal protection. Focusing on the application to innovation, in an environment where an...

In an earlier paper we presented an entry game with a monopolist and a potential entrant facing financial constraints in which the unique perfect equilibrium involved no entry. Here we consider a one-sided, incomplete information variant of the game in which the monopolist allows for the...