Considering the licensing of a drastic cost-reducing innovation by an outside innovator in an n-firm Cournot oligopoly, we show that when the innovator uses combinations of fees and royalties, there are either n - 1 or n optimal licensing policies.

We provide a game-theoretic alternative of the kinked demand curve explanation of rigid prices. We analyze a duopoly where firms choose quantities and objectives. We identify cases under which firms choose to maximize their revenue. Under these cases, prices are insensitive to unit costs.

We present an alternative proof of Fishburn’s (1975) axiomatization of lexicographic preferences. The essence of our proof lies in identifying “an extremely pivotal factor”. Our proof reconfirms the strong interconnections between Arrow’s and Gibbard–Satterthwaite’s theorems with...