In this paper we show that existence of a Markov perfect equilibrium (MPE) in the Ericson & Pakes (1995) model of dynamic competition in an oligopolistic industry with investment, entry, and exit requires admissibility of mixed entry/exit strategies, contrary to Ericson & Pakes's (1995)...

As is well-recognized, market dominance is a typical outcome in markets with network effects. A firm with a larger installed base others a more attractive product which induces more consumers to buy its product which produces a yet bigger installed base advantage. Such a setting is investigated...

We explore the extent to which the huge race gap in wealth can be explained with properly constructed income and demographic variables. In some instances we explain the entire wealth gap with income and demographics provided that we estimate the wealth model on a sample of whites. However, we...

We characterize a class of dynamic stochastic games that we call separable dynamic games with noisy transitions and establish that these widely used models are protocol invariant provided that periods are sufficiently short. Protocol invariance means that the set of Markov perfect equilibria is...

Two players need to agree to adopt a certain option, otherwise the status quo is maintained. The correct choice depends of an unknown state variable. While both players would like the correct choice to be made, their relative concern with the two types of mistakes may differ and is private...

This paper studies generic properties of Markov perfect equilibria in dynamic stochastic games. We show that almost all dynamic stochastic games have a finite number of locally isolated Markov perfect equilibria. These equilibria are essential and strongly stable. Moreover, they all admit...