Media industries typically exhibit two fundamental features, high fixed costs and heterogeneity of consumer preferences. Daily newspaper markets, for example, tend to support a single product. In other examples, such as radio broadcasting, markets often support multiple differentiated offerings....

We provide an evolutionary foundation to evidence that in some situations humans maintain optimistic or pessimistic attitudes towards uncertainty and are ignorant to relevant aspects of the environment. Players in strategic games face Knightian uncertainty about opponents' actions and maximize...

We propose a general model of monopolistic competition, which encompasses existing models while being flexible enough to take into account new demand and competition features. Using the concept of Frechet differentiability, we determine a general demand system. The basic tool we use to study the...

Do firms seek to make the market transparent,or do they confuse the consumers in their product perceptions? We show that the answer to this question depends decisively on preference heterogeneity. Contrary to the well-studied case of homogeneous goods, confusion is not necessarily an equilibrium...

We provide an evolutionary foundation to evidence that in some situations humans maintain either optimistic or pessimistic attitudes towards uncertainty and are ignorant to relevant aspects of the environment. Players in strategic games face Knightian uncertainty about opponents' actions and...

Consumers may purchase durable goods on the basis of short-term "temptation," as well as their long-term interests. I adapt Gul and Pesendorfer's (2001) representation of self-control preferences to a market for durable goods. Consumers' temptation will increase profit, and can ameliorate a...

We study the effects on the Nash equilibrium of the presence of a structure of social interdependent preferences in a Cournot oligopoly, described in terms of a game in which the network of interactions reflects on the utility functions of firms through a combination of weighted profits of their...

Considering the Cournot oligopoly with interdependent preferences proposed in [5], we analyze the effects of a change in the network of social interactions. Reconsidering some of the main centrality measures proposed in the literature, we show how intercentrality, Bonacich and Friedkin-Jensen...

We propose a model to describe and study the effect of social interdependent preferences in a Cournot oligopoly based on a game in which the utility functions of firms depend on a combination of weighted profits of their competitors. If social interaction is neglected, the model reduces to the...

This paper revisits a vertically differentiated duopoly game where producers first simultaneously set qualities and then simultaneously set prices. We theoretically and experimentally explore the impact of different consumers’ preferences dispersion levels. We find that firms suboptimally...