We consider the evolution of preferences when trade occurs between two countries. We show that if one country is much larger than the other, its preferences can eventually take over the preferences of the second country. This result may provide an explanation of why small countries sometimes...

This paper explains how, in the context of incomplete coordination among all countries, unilateral policies that might at first sight seem pro-green could actually turn out to harm the global environment. The free-riding motives and the difficulty of reaching an effective international...

We consider an economy in which some taxpayers behave in a Kantian way in their donation behavior while others are Nash players. A Kantian taxpayer holds the norm that any suggested deviation from a proposed equilibrium profile would be adopted by him only if when all members of their community...

This paper defines the concept of feedback Kant-Nash equilibrium for a discrete-time model of resource exploitation by infinitely-lived Kantian and Nashian players, where we define Kantian agents as those who act in accordance with the categorical imperative. We revisit a well-known dynamic...

How do economic agents manage expected shifts in regimes? How do they try to influence or prevent the arrival of such shifts? This paper provides a selective survey of the analysis of regime shifts from an economic view point, with particular emphasis on the use of the techniques of optimal...

The purpose of this paper is to model the influence of Kantian moral scruples in a dynamic environment. Our objectives are two-fold. Firstly, we investigate how a Nash equilibrium among agents who have moral scruples may ensure that the exploitation of a common property renewable resource is...

This paper investigates the relationship between electoral incentives, institutions and corruption. We assume that voters use a yardstick criterion. The incumbent provides a public good and extracts rent, which are financed by imposing a distortionary tax. We demonstrate the possibility that...

Given its significance in practice, the piecewise linear tax system seems to have received disproportionately little attention in the literature on optimal income taxation. This paper offers a simple and transparent analysis of its main characteristics. -- Piecewise linear ; income ; taxation

This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for industry productivity. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms and endogenous R&D. Among the robust results that hold...

This paper develops sufficient conditions under which the Weak Green Paradox may (and may not) hold in terms of subsidies for biofuel production such that the supply-side responses by fossil fuel producers may more than offset the substitution to biofuels. Analytical results are derived and...