We examine a generic three-stage game for two players with alternating moves, where the first player can choose the level of adjustment cost to be paid in the last period to modify the action she announced in the first period. In the resulting continuum of commitment options, convexifying the...

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...

We show that the price-setting subgame in the classic Hotelling’s model (1929) with the linear transport costs has the unique equilibrium solution for all location pairs under the assumption that duopolists secure themselves against being driven out of the market by undercutting. In contrast...

This note provides an alternative construction to Blume (2003) of equilibria in the standard model of Bertrand competition with homogeneous products and different marginal costs that achieve the conventional outcome. In addition, I provide a means to select one of these equilibria.

This paper (a) characterizes the unique Nash equilibrium of the unidirectional Hotelling–Downs game in which firms maximize their market shares, for any distribution of the consumers, and (b) analyzes equilibrium behavior in the variation of the game in which each firm aims to secure a larger...

We explore asymmetries in the way consumers sample prices in a simple sequential search framework. In equilibrium, the price distribution of a firm catering to more local consumers first-order stochastically dominates that of its rival. Prices rise in the degree of asymmetry.

We examine the average equilibrium price when quantity setting oligopolies price discriminate. It is known that for the price discrimination extension of Cournot competition the average price is independent of the extent of price discrimination whenever the demand is linear. We show that this...

Central banks, wanting to devalue their currency, often intervene in the foreign exchange market by buying up foreign currency. Such interventions even if effective lead to a build up of foreign exchange reserves. This paper argues that the coupling of devaluation and reserve build up can be...

This paper contributes to the literature on the Environmental Kuznets Curve (EKC) by determining the effect of water abundance on an EKC for water pollution. Results indicate that water abundance greatly affects the turning point of an EKC.