This paper examines optimal two-period financial contracts between firms in a product market on the one side and banks as creditors on the other side. Similar to the Bolton-Scharfstein contracts, banks can mitigate the moral hazard problem of truthfully revealing the ex ante unknown profits of...

Based on a stochastic dynamic model of a firm's optimal innovative behavior we derive a simultaneous equation system for product and process innovations with intertemporal spillover effects. We estimate various versions of the model with dichotomous Innovation data at the firm level by using a...

This paper analyzes the influence of Information structure on the process of knowledge accumulation in a differential game of duopolistic R&D competition. By comparing open-loop and feedback Nash equilibria, representing imperfect and perfect information structures, we show that in the feedback...

Aufgabe des vorliegenden Beitrages ist es, die wesentlichen Elemente und die Funktionsweise des strukturalistischen Ansatzes darzustellen und ihn auf seine Erklärungskraft bzgl. der empirisch festzustellenden andauernden Arbeitslosigkeit in den westlichen Industrieländern zu überprüfen. Eine...

In three-person envy games, an allocator, a responder, and a dummy player interact. Since agreement payoffs of responder and dummy are exogenously given, there is no tradeoff between allocator payoff and the payoffs of responder and dummy. Rather, the allocator chooses the size of the pie and...

We present a class of dynamic general-equilibrium models of education, innovation and technology transfer to explain the evolution of industries and aggregate growth in closed and open economies. Firms employ educated workers in order to develop higher-quality products. The realization of...

We study product market competition between firm owners (principals) where workers (agents) decide on their efforts and, hence, on output levels. Two worker compensation schemes are compared: a piece rate compensation as a benchmark when workers' output performance is verifiable, and a...

This paper analyzes blindfolded versus informed ultimatum bargaining where proposer and responder are both either uninformed or informed about the size of the pie. Analyzing the transition from one information setting to the other suggests that more information induces lower (higher) price...

The paper studies a two-stage location-price duopoly game in a disk city with consumer concentration around the city center. When consumers are uniformly distributed over the plane, unconstrained firms locate outside of the city. Consumer concentration, however, induces firms to locate nearer to...

In a capacity-then-price-setting game we experimentally identify capacity precommitment, the possibility to communicate before price choices, and prior competition experience as crucial factors for collusive pricing. The theoretical analysis determines the capacity thresholds above which firms...