Empirical evidence shows that an increase in trade liberalisation causes an increase in foreign direct investments (FDIs). Here we propose an explanation to this apparent puzzle by exploiting the intensity of competition in a Bertrand duopoly with convex costs where the two firms enter in a new...

We modify the price-setting version of the vertically differentiated duopoly model by Aoki (2003) by introducing an extended game in which firms noncooperatively choose the timing of moves at the quality stage. Our results show that there are multiple equilibria in pure strategies, in which...

This paper proposes a theory on how students.social background affects their school attainment and job opportunities. We study a setup where students differ in ability and social background, and we analyse the interaction between a school and an employer. Students with disadvantaged background...

We examine a duopoly with polluting production where firms adopt a form of corporate social responsibility (CSR) to define their objective functions. Our analysis focusses on the bearings of CSR on collusion over an infinite horizon, sustained by either grim trigger strategies or optimal...

Grade inflation or soft grading is a common feature of the educational systems of many countries. In this paper I analyse grade inflation in a setting in which students differ in social background, and the grading policy can be targeted according to student type. I consider a signalling game...

This paper examines how assortative matching affects graduate earnings through the choice of attending university. We build up a model where individuals decide whether to attend university for increasing both their future income and the probability to marry an educated partner. The theoretical...

We build up a differential game to investigate the interplay between the quality of health care and the presence of an evolving disease in a duopoly where patients are heterogeneous along the income dimension. We prove unicity, stability and perfection of the open-loop Nash solution. Moreover,...

This paper argues that assortative matching may explain over-education. Education determines individuals' income and, due to the presence of assortative matching, the quality of the partner, who can be a colleague or a spouse. Thus an individual acquires some education to improve the expected...

We modify the vertically differentiated duopoly model by André et al. (2009) replacing Bertrand with Cournot behaviour to show that firms may spontaneously adopt a green technology even in the complete absence of any form of regulation.

We investigate the introduction of a minimum quality standard (MQS) in a vertically differentiated duopoly with an environmental externality. We establish that the MQS bites only if the hedonic component of consumer preferences is sufficiently strong. Then, we illustrate an underlying tradeoff...