In this paper, we discuss the possibility of strategic behavior and truthful reporting in a two players' announcement game when there is a cost for getting information. First we show that the best strategy of each player is to announce the observed signal truthfully if the announcement is made...

It is well known that in a two stage duopoly model of product choice with quadratic transportation cost, the firms locate at the extreme endpoints of the market. This paper examines this model in an infinite horizon setting where in the initial period the firms choose locations and in subsequent...

This paper first inverts a general class of matrices for solving Bertrand equilibria from arbitrary coalition structures in linear Bertand oligopolies. It then studies merger incentives and obtains two main results; 1) for any asymmetric costs, mergers of any size are profitable; 2) a merger will...

We introduce capacity constrained competition between market-making intermediaries in a model in which agents can choose between trading with intermediaries, joining a search market or remaining inactive. Recently, market-making by a monopolistic intermediary has been analyzed by Rust and Hall...

There are a lot of goods which have network externalities. While the number of players who have such a good is small, they may not get enough utility from the goods. That is, players have an incentive to delay their decision, when they purchase the goods with network externalities. Delay causes...

In this paper we characterize equilibria in a quantity game where symmetric firms face a local demand together with an export-constrained demand. Firms have unlimited access to a local demand but a restricted access to a second market, like in the electricity network where generators compete to...

It is well-known that subgame-perfect Nash equilibrium does not eliminate incentives for joint-deviations or renegotiations. This paper presents a systematic framework for studying non-cooperative games with group incentives, and offers a notion of equilibrium that refines the Nash theory in a...

The pervasive role of information and communications technology (ICT) in the new economy is well documented. There is now considerable agreement among scholars regarding the ICT contribution to national productivity growth. On the other hand, the production spillover and network externality...

In this paper, an infinitely-repeated Bertrand game is considered. The model has a two-tier relationship; two firms make a self-enforced collusive agreement and each firm writes a law-enforced contract to its privately-informed agent. The main finding is that in optimal collusion, interaction...

This paper uses household-level data of cellular usage to provide estimates of the implied switching costs that preclude consumers from switching providers in the face of competing offers. Our estimation differs from previous switching costs studies in that we are able to observe individual...