The U.K.'s decision to leave the EU and the voting in of the protectionist Donald Trump to the US presidency has drawn both the UK and the USA into the Nash Trap.U.S. mathematician John Nash (the movie ‘A Beautiful Mind') postulated that Adam Smith's declaration that ‘In competition,...

In this paper, we combine the strategic delegation approach of Fershtman-Judd-Sklivas with contests. The results show that besides a symmetric equilibrium there also exist asymmetric equilibria in which one owner induces pure sales maximization to his manager so that all the other firms drop out...

In this paper, we combine the strategic delegation approach of Fershtman-Judd-Sklivas with contets. The results show that besides a symmetric equilibrium there also exist asymmetric equilibria in which one owner induces pure sales maximization to his manager so that all the other firms drop out...

Firms' quality commitment can efficiently improve the demand. This paper addresses the quality commitment under the duopoly. By establishing a Cournot model, the effects of quality commitment are discussed. Firstly, under one-sided quality commitment, the higher efficiency firm committing in...

When avoidable fixed costs are introduced into the entry model of Dixit (1980) and Ware (1984), there arises a coordination problem in selecting among post-entry Nash equilibria. Elimination of weakly dominated strategies allows the entrant to use a market-capturing strategy, consisting of a...

Various approaches used in Agent-based Computational Economics (ACE) to model endogenously determined interactions between agents are discussed. This concerns models in which agents not only (learn how to) play some (market or other) game, but also (learn to) decide with whom to do that (or not).

In this article, we consider how important developments in game theory have contributed to the theory of industrial organization. Our goal is not to survey the theory of industrial organization; rather, we consider the contribution of game theory through a careful discussion of a small number of...

We consider a heretofore unexplored explanation for why platforms, such as Internet service providers, might impose download limits on content consumers: doing so increases the degree to which those consumers view content providers products as substitutes. This, in turn, intensifies competition...

We develop a method to estimate a game’s primitives in complex dynamic environments. Because of the environment’s complexity, agents may not know or understand some key features of their interaction. Instead of equilibrium assumptions, we impose an asymptotic ε-regret (ε-AR) condition on...