We analyze situations where a player must contract with the monopoly supplier of an essential input in order to play an action in a strategic form game. Supplier monopoly power does not distort the equilibrium distribution over player actions under private contracting, but may dramatically...

This paper analyzes behavior on a TV game show where players' monetary payoffs depend upon an array of factors, including ability in answering questions, perceived cooperativeness and the willingness of other players to choose them. We find a substantial beauty premium and are able to...

Bagwell (1995) argues that commitment in undermined by the slightest imperfectness in observation. Guth, Ritzberger & Kirchsteiger (1998) question this assertion: for any finite leader-follower game, with arbitrary many players in each role and generic payoffs, they show that there always exists...

A number of theories (search and efficiency wages) have been developed, in part, to explain why identically able workers are often paid different wages. However, when there is a minimum wage, they do not explain the resulting "spike" in the wage distribution. Our model's predictions are...

Recent empirical work on the effects of minimum wages has called into question the conventional wisdom that minimum wages invariably reduce employment. We develop a model of \emph{monopsonistic competition} with \emph{free entry} to analyze the effects of minimum wages, and our predictions fit...

A number of theories (search and efficiency wages) have been developed, in part, to explain why identically able workers are often paid different wages. However, when there is a minimum wage, they do not explain the resulting ``spike" in the wage distribution. Our model's predictions are...

In cricket, the right to make an important strategic decision is assigned via a coin toss. We utilize these "randomized trials" to examine (a) the consistency of choices made by teams with strictly opposed preferences, and (b) the treatment effects of chosen actions. We find significant evidence...

We present a simple menu cost model which explains the finding that firms are more likely to adjust prices upward than downward. Asymmetric adjustment to shocks arises naturally, even without trend inflation, from the desire of firms to keep industry prices as high as is sustainable and the...