A quantum financial approach to finite games of strategy is addressed, with an extension of Nash's theorem to the quantum financial setting, allowing for an entanglement of games of strategy with two-period financial allocation problems that are expressed in terms of: the consumption plans'...

A common feature of many speculative attack models on currencies is the existence of multiple equilibrium solutions. When choosing the equilibrium strategy a trader faces Knightian uncertainty about the rational choice of the other traders. We show that the concept of Choquet expected utility...

In this short note, we show investors one way to calculate ideal investment sizing by using two rules of thumb based on a simple outline of individual risk aversion. We illustrate these two heuristics, which are not widely appreciated, with thought experiments involving coin flips and ketchup &...

This paper attempts to form a model which can help explain the evolving regulatory regime around insider trading. We develop a simple sequential game-theoretical model of insider trading transactions and, utilizing Monte Carlo simulation to determine equilibrium, we show that costly...

We study the coordination problem of a two-firm supply chain in which firms simultaneously choose a capacity before demand is realized. We focus on the role that (a lack of) common knowledge of demand forecasts has on firms' ability to align their capacity decisions. When forecasts are not...

This paper introduces a model of a stylized organization that is comprised of several departments that autonomously allocate tasks. To do so, the departments either take short-sighted decisions that immediately maximize their utility or take long-sighted decisions that aim at minimizing the...

Alliances between competitors where an established firm provides access to its marketing and distribution channels are an important real-world phenomenon. We analyze a market where an established firm, firm A, produces a product of well-known quality, and a firm with an unknown brand, firm B,...

We show how an upstream firm by using a price-dependent profit-sharing rule can prevent destructive competition between downstream firms that produce relatively close substitutes. With this rule the upstream firm induces the retailers to behave as if demand has become less price elastic. As a...

The impact of information technology (IT) on the stability of market equilibrium is explained from a simple microeconomic standpoint. Attributes of a dynamically stable “virtual” market equilibrium are described assuming consumer rationality, an elastic supply curve, and minimum static...

This paper investigates a contest in information revelation between firms that seek to persuade consumers by revealing positive own information and negative information about the rival. In the face of limited bandwidth, firms are forced to make a trade-off between disclosing their own positive...