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This paper characterizes the set of Nash equilibria in a model of price-setting duopoly in which each firm has limited capacity, and demand is continuous and decreasing. In general there is a unique equilibrium, so that comparative static exercises are meaningful. The properties of the equilibrium conform with a number of stylized facts. The equilibrium(More)
Recent studies have found evidence linking Africa's current under-development to colonial rule and the slave trade. Given that these events ended long ago, why do they continue to matter today? I develop a model, exhibiting path dependence, that explains how these past events could have lasting impacts. The model has multiple equi-libria: one equilibrium(More)
In this paper, we compare an n-firm Cournot game with a Stackelberg model, where n-firms choose outputs sequentially, in a stochastic demand environment with private information. The Stackelberg perfect revealing equilibrium expected output and total surplus are lower while expected price and total profits are higher than the Cournot equilibrium ones(More)
What is the impact on human capital investment when a worker's ability and investments are observed by the labour market only when the worker invests in self-promoting activities? When …rms pay spot market wages, high ability workers overinvest in self-promotion. There is no employment contract that attains full e¢ciency. Constrained e¢ciency is attained(More)
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