This paper analyzes a dynamic mixed duopoly in which a profit-maximizing competitor interacts with a competitor that prices at zero (or marginal cost), with the cumulation of output affecting their relative positions over time. The modeling effort is motivated by interactions between Linux, an open-source operating system, and Microsoft's Windows in the… (More)
This paper provides an axiomatic foundation for a maxmin expected utility over a set of priors (MMEU) decision rule in an environment where the elements of choice are Savage acts. This characterization complements the original axiomatiza-tion of MMEU developed in a lottery-acts (or AnscombeeAumann) framework by I. MMEU preferences are of interest primarily… (More)
We provide an axiomatic foundation for a maxmin expected utility over a set of priors (MMEU) decision rule in an environment where the elements of choice are Savage acts. The key axioms are stated using statewise combinations as in Gul [Gul, F., 1992. Savage's theorem with a finite number of states.
We study individuals' behavior in an environment that is deterministic, but too complex to permit tractable deterministic representation. Under mild conditions, behavior is represented by a unique probabilistic model in which the agent's inability to think through all contingencies of the problem translates into uncertainty about random states. We interpret… (More)
Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author. Abstract What makes a decision strategic? When is strategy most important? This paper studies the structure and value of… (More)