Bradley J. Ruffle and Oscar Volij, (2012) “First-Mover Advantage in Two-Sided Competitions: An Experimental Comparison of Role-Assignment Rules." Discussion Paper No. 12-08, Monaster Center for Economic Research, Ben-Gurion University of the Negev, Israel.
Available at SSRN: http://ssrn.com/abstract=2128225 or http://dx.doi.org/10.2139/ssrn.2128225. [PDF]
Kingston (1976) and Anderson (1977) show that the probability that a given contestant wins a best-of-2k 1 series of asymmetric, zero-sum, binary-outcome games is, for a large class of assignment rules, independent of which contestant is assigned the advantageous role in each component game. We design a laboratory experiment to test this hypothesis for four simple role-assignment rules. Despite the fact that play does not uniformly conform to the equilibrium, our results show that the four assignment rules are observationally equivalent at the series level: the fraction of series won by a given contestant and all other series outcomes do not differ across the four rules.
Gary Charness, Francesco Feri, Miguel A. Meléndez-Jiménez, and Matthias Sutte (2012) “Equilibrium Selection in Experimental Games on Networks." working paper, Department of Economics, UC Santa Barbara. [pdf] [ideas]
Abstract. We study behavior and equilibrium selection in experimental network games. We vary two important factors: (a) actions are either strategic substitutes or strategic complements, and (b) subjects have either complete or incomplete information about the structure of a random network. Play conforms strongly to the theoretical predictions, providing an impressive behavioral confirmation of the Galeotti, Goyal, Jackson, Vega-Redondo, and Yariv (2010) model. The degree of equilibrium play is striking, even with incomplete information. We find that under complete information, subjects typically play the stochastically-stable (inefficient) equilibrium when the game involves strategic substitutes, but play the efficient one with strategic complements. Our results suggest that equilibrium multiplicity may not be a major concern Subjects’ actions and realized outcomes under incomplete information depend strongly on both the degree and the connectivity. When there are multiple equilibria, subjects begin by playing the efficient equilibrium, but eventually converge to the inefficient one.
Patrick Rey and David Salant(2012) “Abuse of dominance and licensing of intellectual property." International Journal of Industrial Organization,Volume 30, Issue 6, November 2012, Pages 518–527. DOI. Other PDF.
We examine the impact of the licensing policies of one or more upstream owners of essential intellectual property (IP hereafter) on the variety offered by a downstream industry, as well as on consumers and social welfare. When an upstream IP monopoly increases the number of licenses, it enhances product variety, adding to consumer value, but it also intensifies downstream competition, and thus dissipates profits. As a result, the upstream IP monopoly may want to provide too many or too few licenses relative to what maximizes consumer surplus or social welfare.
With multiple IP owners, royalty stacking increases aggregate licensing fees and thus tends to limit the number of licensees, which can also reduce downstream prices for consumers. We characterize the conditions under which these reductions in downstream prices and variety are beneficial to consumers or society.
Martin F Hellwig (1980) “On the aggregation of information in competitive markets." Journal of Economic Theory, Volume 22, Issue 3, June 1980, Pages 477–498. http://dx.doi.org/10.1016/0022-0531(80)90056-3,