Second, with Cournot competition, small firms tend to win auctions for capacity. Finally, I describe on-going work to design selling mechanisms for the purpose of extracting surplus when there is only one buyer. It permits the design of new selling methods, such as the spectrum auctions used by the Federal Communications Commission. It provides a supplement to the traditional survey approach for assessing the value of new products. It provides insights into subcontracting and purchasing methods, and in particular, the disadvantages of sole-source negotiation when competition is possible.
Further research is both necessary and important.
Finally, the game-theoretic approach emphasizes the reaction of rival firms, as well as consumers, to changing marketing strategy. We close with some observations on rival firms' reactions, applied to product-line pricing. These are slides for a 1995 seminar. American Economic Growth and the Voyage of Columbus , American Economic Review , September 1983.