This paper analyses the sources of buyer power and its expect on sellers investment. We show that a retailer extracts a larger surplus from the negotiation with an upstream manufacturer the more it is essential to the creation of total surplus. In turn, this depends on the rivalry between...

We provide a self-contained, selective overview of the literature on the role of knowledge and beliefs in game theory. We focus on recent results on the epistemic foundations of solution concepts, including correlated equilibrium, rationalizability in dynamic games, forward and backward induction.

The authors provide an epistemic analysis of forward induction in games with complete and incomplete information. They suggest that forward induction may be usefully interpreted as a set of assumptions governing the players' belief revision processes, and define a notion of strong belief to...

The authors argue that the rationalizability approach is particularly appropriate to analyze games with genuine incomplete information.