We call a correspondence, defined on the set of mixed strategy pro les, a generalized best reply correspondence if it (1) has a product structure, (2) is upper hemi-continuous, (3) always includes a best reply to any mixed strategy pro le, and (4) is convex- and closed-valued. For each...

Two parties bargaining over a pie, the size of which is determined by their previous investment decisions. Investment costs are heterogeneous. The bargaining rule is sensitive to investment behavior. Two games are studied which differ for the considered sociopolitical structure: communal...

Trust in policy makers fluctuates significantly over the cycle and a¤ects the transmission mechanism. Despite this it is absent from the literature. We build a monetary model embedding trust cycles; the latter emerge as an equilibrium phenomenon of a game-theoretic interaction between atomistic...

Rather than about absolute payoffs, governments in fiscal competition often seem to care about their performance relative to other governments. Moreover, they often appear to mimic policies observed elsewhere. We study such behaviour in a tax competition game with mobile capital à la...

We describe in this paper an evolutionary game theoretic model aiming at representing the climate change negotiation. The model is used to examine the outcome of climate change negotiations in a framework which seeks to closely represent negotiation patterns. Evolutionary setting allows us to...

One may misread economic theory on climate policy to provide a warning against unilateral mitigation. While important lessons are drawn from ‘global problems require global solutions,’ these say little about what to do in a phase before or without a global agreement - or with weak ones. In...