A dealer needs access to order flow and information to make a market profitably in a Nasdaq stock. Several variables that proxy for the stocks that an individual market maker’s brokerage customers trade, including volume, location, underwriting participation and analyst coverage, are significant determinants of market making activity. Informational advantages may also factor in the market makin...

The paper studies bidder behavior in simultaneous, continuous, ascending price auctions. We design and implement a ‘‘collusion incubator’’ environment based on a type of public, symmetrically ‘‘folded’’ and ‘‘item-aligned’’ preferences. Tacit collusion develops quickly and reliably within the environment. Once tacit collusion developed, it proved remarkably robust to institutional changes that ...

We revisit the two-stage duopoly game with strategic delegation and asymmetric technologies of Sen and Stamatopoulos (2015). We show that their conclusions are misled by the restrictive assumption that the extent of delegation to managers is restricted to a binary set. Allowing for a continuous set of delegation incentives, we prove that the delegation stage is a prisoners’dilemma, the unique s...

The paper studies an incentive contract in a monopolistic and duopolistic credit market where borrowers are different in risk. One lender is in an advantaged position with respect to the other due to past relations with the borrowers. The features of the equilibrium contract are investigated. It is shown that the equilibrium contract drastically changes between the monopolistic and the duopolis...

In the history of alleged manipulations on forward markets, it has been observed that high prices resulted from a cartel’s long positions. The present paper addresses this issue in a simple model of price setting duopolists. We show that forward trading results in producers buying forward their own production, so that equilibrium prices are increased compared to the case without forward trading...

In recent years there has been some dispute over the appropriate way to model decisionmaking in professional sports leagues. In particular, Szymanski and Kesenne (2004), argue that formulating the decision-making problem as a noncooperative game leads to radically different conclusions about the nature of competition in sports leagues. This paper describes a simulation model that van be used in...

This paper revisits the standard analysis of licensing a cost reducing innovation by an outside innovator to a Cournot oligopoly. We propose a new mechanism that combines elements of a license auction with royalty licensing by granting the losers of the auction the option to sign a royalty contract. The optimal new mechanism eliminates the losses from exclusionary licensing without reducing bid...

We offer a new perspective on games of irreversible investment under uncertainty in continuous time. The basis is a particular approach to solve the involved stochastic optimal control problems which allows to establish existence and uniqueness of an oligopolistic open loop equilibrium in a very general framework without reliance on any Markovian property. It simultaneously induces quite natura...

We examine the e¤ects of mobile termination rate regulation in asymmetric oligopolies. We do this by extending existing models of asymmetric duopoly and symmetric oligopoly where consumer expectations about market shares are passive. We …rst calibrate product di¤erentiation parameters using detailed data from the Spanish market from 2010. Next, we predict equilibrium outcomes and welfare e¤ects...

In order to analyse the stability of cartel structures in a Cournot oligopoly, I propose a noncooperative game of coalition formation in which any group of firms can induce a dismantling deviation such that each member is in a smaller cartel in the resulting structure. It is required that a deviation only occurs if it is robust against further dismantling deviation. I characterise the set of st...