We consider an "arms race" game, where two players simultaneously decide whether or not to aquire new weapons. Each player has a type, which is his private information. Types are independent. With probability close to one, the best outcome for each player is for neither to acquire new weapons...

This paper shows that generators exercised increasing market power in the England and Wales wholesale electricity market in the second half of the 1990s despite declining market concentration. It examines whether this was consistent with static, non-cooperative oligopoly models, which are widely...