@techreport{d3f8cd4beaf04c1caed45e4ccfb2d80d,
title = "Balance of Power",
abstract = "This paper argues that the efficiency distribution of players in a game determines how aggressively these players interact.We formalize the idea of balance of power: players fight very inefficient players but play softly versus equally (or more) efficient players.This theory of conduct predicts that entry by new firms leads to a less aggressive outcome if it creates a balance of power. A balance of power is created if more players get technologies that are close to the most efficient technology.Using a related argument, we show that an increase in entry costs can lead to more aggressive outcomes.",
keywords = "pricing games, Folk theorem, refinement of predicted outcomes, supergames, contestable market",
author = "J. Boone",
note = "Pagination: 34",
year = "2004",
language = "English",
volume = "2004-104",
series = "CentER Discussion Paper",
publisher = "Macroeconomics",
type = "WorkingPaper",
institution = "Macroeconomics",
}