A Nash Equilibrium is a joint strategy profile at which each agent myopically plays a best response to the other agents’ strategies, ignoring the possibility that deviating from the equilibrium could lead to an avalanche of successive changes by other agents. However, such changes could potentially be beneficial to the agent, creating incentive to act non-myopically, so as to take advantage of ...

In this note we consider a general equilibrium model with oligopolistic competition between firms who ignore the feedback effect of their dividend payments on demand. The outcome of this competition coincides with the perfectly competitive equilibrium solution, provided that firms have identical production technologies. I would like to thank Atsushi Kajii and two anonymous referees for helpful ...

In this paper, we study an N-person Nash-Cournot game with a price cap. Under certain mild conditions, we show that this game can be formulated as a complementarity problem. Based on this formulation, we study various properties of the game, including equilibrium existence, computability, and a description of the equilibrium set when there are multiple equilibria.

This paper considers a Cournot competition between a nonprofit firm and a for-profit firm in a homogeneous goods market, with uncertain demand. Given an asymmetric tax schedule, we compute explicitly the Bayesian-Nash equilibrium. Furthermore, we analize the effects of the tax rate and the degree of altruistic preference on market equilibrium outcomes.

This paper extends the Cournot and Bertrand models of strategic interaction between firms by assuming that managers are not only profit maximizers, but also have preferences for reciprocity or are averse to inequity. A reciprocal manager responds to unkind behavior of rivals with unkind actions, while at the same time, it responds to kind behavior of rivals with kind actions. An inequity averse...

We compare two alternative mechanisms for capping prices in two-settlement electricity markets. With sufficient lead time, forward market prices are implicitly capped by competitive pressure of potential entry that will occur when forward prices rise above some backstop price. Another more direct approach is to cap spot prices through a performance-based regulatory intervention. In this paper w...