This paper explores the role of testing in models of asymmetric information. The authors demonstrate conditions under which testing for underlying characteristics can overcome adverse selection problems and lead to a full-information competitive equilibrium. This paper provides a more general...

In Cournot's model of complements, the producers of A and B are bothmonopolists. This paper extends Cournot's model to allow for competitionbetween complements on one side of the market. Consider two complements,A and B, where the A + B bundle is valuable only when purchasedtogether. Good A is...

Economic theory offers two different approaches to the analysis of group formation and the role of institutions. The general equilibrium approach explores the influence of the economic environment on the formation of groups. The game theoretic approach runs in the opposite direction; it explores...

In March 2004, following a five-year investigation, the European Commission found Microsoft liable for illegally tying the Windows Media Player to the Windows operating system. This Column evaluates the antitrust issues and the proposed remedy. What is remarkable is that the remedy eliminates...

This article develops a rational theory of minimal nuclear deterrence: What is the minimal amount of weapons needed to maintain a stable balance of power? By searching for the requirements of minimal nuclear deterrence, we hope to gain a better understanding of how to proceed with arms reduction...