To be represented by more than one contestant in a contest has advantages and disadvantages. This paper determines the conditions under which it is favorable to send several agents into the contest.

In theory, the incidence of a tax should be independent of which side of the market it is levied on. This principle of liability side equivalence underlies virtually all theories of tax incidence. Policy discussions, however, tend to place great emphasis on the legal division of tax payments. We...

We report on an experiment designed to compare Stackelberg and Cournot duopoly markets with quantity competition. For each market we implement both a random matching and fixed-pairs version. Stackelberg markets yield, regardless of the matching scheme, higher outputs than Cournot markets. Under...

Competition in some markets is a contest. This paper studies the merger incentives in such markets. Merger can be profitable. The profitability depends on the post-merger contest structure, the discriminatory power of the contest and on the number of contestants.

We propose a model in which mergers exert a more pronounced effect on the structure of a market than simply reducing the number of competitors. We show that this may render horizontal mergers profitable and welfare-improving even if costs are linear. The results help to reconcile theory with...

In this study we propose a formal framework for the indirect evolutionary approach as initiated by Güth and Yaari (1992). It allows to endogenize preferences and to study their evolution. We define two-player indirect evolutionary games with observable types and show how to incorporate...

We investigate simultaneous and sequential price competition in duopoly markets with differentiated products. In both markets symmetric firms are repeatedly and randomly matched. The strategy method is used to elicit behavior in the sequential market. We find that average leader prices in the...

We report experimental results on exclusive dealing inspired by the literature on "naked exclusion.'' Our key findings are: First, exclusion of a more efficient entrant is a widespread phenomenon in lab markets. Second, allowing incumbents to discriminate between buyers increases exclusion rates...

We consider a vertically related industry and analyze how the total harm due to a price increase upstream is distributed over downstream firms and final consumers. For this purpose, we develop a general model without making specific assumptions regarding demand, costs, or the mode of...

Direct reciprocity means to respond in kind to another person whereas indirect reciprocity is understood here as rewarding someone else. We perform corresponding experiments which use a similar underlying structure as the reciprocity experiment of Berg, Dickhaut, and McCabe (1995). Another...