Eric van Damme

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This paper analyzes data for a random sample drawn from the Dutch population who reveal their capacity to provide and sustain social capital by their propensity to invest and reward investments by means of an economic experiment. We have three main results. First, we find that heterogeneity in behavior is characterized by several asymmetries — men, the(More)
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Iterated elimination of strictly dominated strategies is an order dependent procedure. It can also generate spurious Nash equilibria, fail to converge in countable steps, or converge to empty strategy sets. If best replies are well-defined, then spurious Nash equilibria cannot appear; if strategy spaces are compact and payoff functions are(More)
We consider a linear price setting duopoly game with differentiated products and determine endogenously which of the players will lead and which one will follow. While the follower role is most attractive for each firm, we show that waiting is more risky for the low cost firm so that, consequently, risk dominance considerations, as in Harsanyi and Selten (A(More)
In February 1998 the Dutch government auctioned licences to operate mobile telecommunications networks according to the DCS-1800 technology. Two “national” licences and sixteen “regional” ones were auctioned by using a variant of the simultaneous, multiple round auction that was proposed by US-economists and that had been tested in the US. This paper(More)
A benchmark model of a married couple's educational investment yields an inefficient outcome due to the possibility of opportunistic divorce. Motivated by findings in social psychology, I use psychological game theory to incorporate belief-dependent guilt feelings. Multiple equilibria become possible. Some marriages have inefficient under-investment. Some(More)
We consider a linear quantity setting duopoly game and analyze which of the players will commit when both players have the possibility to do so. To that end, we study a 2-stage game in which each player can either commit to a quantity in stage 1 or wait till stage 2. We show that committing is more risky for the high cost rm and that, consequently, risk(More)
JEL code: C72 keywords: evolution, mutation rates, mistakes ¤The authors are grateful for helpful comments from one referee and one associate editor of this journal, as well as from Sjaak Hurkens, Jens Josephson, Alexander Matros, Arthur Robson, Maria Saez-Marti and Philippe Solal, and participants at seminars at the London School of Economics, the EEA 1999(More)
In this paper we review, and draw some lessons from, the UMTS-auctions that have taken place in Europe during 2000 and 2001. We address several design issues and, in particular, focus attention on asymmetries between the bidders and on possibilities for collusion. An outlook is provided to several other auctions in which the stakes may not be so high, but(More)