In this paper we study a two period contest where the strength of players in the second period depends on the result of the contest in the first stage. We show that in contrast to one-shot contests in the same setting, heterogeneous players exert different efforts in the first stage and rent...

We characterize the sharing rule for which a contribution mechanism achieves efficiency in a cooperative production setting when agents are heterogeneous. This rule differs from the one obtained by Sen for the case of identical agents. We also show for a large class of sharing rules that if Nash...

In this paper we present a model of war between two rational and completely informed players. We show that in the absence of binding agreements war can be avoided in many cases by one player transferring money to the other player. In most cases, the "rich" country transfers part of its money to...