Asymmetric inforation and fear of acquiring a “lemon” may explain the paucity of foreign investment in emerging market economies. If investors are uncertain about the profitability of investments, intrinsically inefficient, temporary partnerships or joint ventures may serve as mechanisms...

We study equilibrium selection by evolutionary learning in monotone signalling games. The learning process is a development of that introduced by Young for static games extended to deal with incomplete information and sequential moves; it thus involves stochastic trembles. For vanishing trembles...

Political involvement in the operation of an enterprises, whether it is private or state owned, creates opportunities for interest groups to influence the allocation of resources. I analyze how the influence externality arising form the interest groups´lobby activities disables the Coase...

This paper studies the allocation and rent distribution between buyers and the seller in multiple units sealed-bid auctions. We restrict attention to the complete information case. A simple diagrammatic exposition of equilibria in the first-price and uniform-price auctions is provided and their...

The importance of ownership structure is analyzed in a simple voting framework. The model contains a market failure arising from the market not internalizing the total surplus from trade and a political failure arising from the government catering to the interests of the median voter. In a...

We analyze how duopoly competition affects the incentives of firms to signal quality through prices. One firm has a high quality, the other a low, but initially potential customers are unable to verify who has the high quality. The incentives are such that the high quality firm prefers to reveal...

This paper explores a generalized spatial voting model in which parties are not supposed to be identical before the game. This new approach to the political market leads to substantial changes in parties' strategies. Our model provides new explanations of why parties may choose non median...

A standard oligopoly model of bundling shows that bundling by a firm with a monopoly over one product has a strategic effect because it changes the substitution relationships between the goods among which consumers choose. Bundling in appropriate proportions is privately profitable, reduces...

The choice between quantity and price in order to stabilize collusion is modeled here. It is shown that this relocates the prisoners’ dilemma backwards, from the market stage to the stage where the market variable is chosen in order to sustain collusion, and where discount rates appear as the...

This paper examines the issue of optimal tariffs for a small economy that trades with a large economy. We define `small' and `large' in the sense that the world prices are determined solely by the large country and, therefore, the small country faces exogenously given world prices. Within this...