We introduce strategic behaviour in assigning a certain distribution channel to a product of a particular quality. We propose a variety of models to analyze and study some of the determinants of the choice of distribution channels. Taking the Gabszewicz and Thisse's (1979) model as a benchmark,...

We show the role of unmediated talk with computational complexity bounds as both an information transmission and a coordination device for the class of two-player games with incomplete information and rational parameters. We prove that any communication equilibrium payoff of such games can be...

Game theory lacks an explanation of how players' beliefs are formed and why they are in equilibrium. This is the reason why it has failed to make significant advances with the problem of equilibrium selection even for quite simple games, as 2 x 2 games with two strict Nash equilibrium. Our paper...

We examine an asymmetric noncooperative game between two manufacturers selecting the number of retailers who can distribute their products. In deciding whether to distribute through one or both retailers, there are two conflicting effects: the output expansion effect, because the product is sold...

We examine a monopoly facing an uncertain demand and maximizing profits over a two-period horizon. Conditions are developed under which the firm will find it optimal to "experiment," or adjust initial prices or quantities away from their myopically optimal level in order to increase the...

The main contribution of this paper is the development and application of cryptographic techniques to the design of strategic communication mechanisms. One of the main assumptions in cryptography is the limitation of the computational power available to agents. We introduce the concept of...

This paper is a note on how Information Theory and Codification Theory are helpful in the computational design of both communication protocols and strategy sets in the framework of finitely repeated games played by bounded rational agents. More precisely, we show the usefulness of both theories...

In this paper, we focus on price competition between several multiproduct firms which produce differentiated systems, each consisting of two complementary products. It is shown here that if firms are restricted to pure component pricing (bundling is not allowed) whenever components produced are...