This paper discusses the impact of foreign direct investment (FDI) on market entry and welfare. It assumes that firms may enter markets in the first period as national firms only. In the second period, however, FDI is possible. The paper demonstrates that FDI reduces market entry because...

This note discusses the influence of state ownership on optimal export taxes. We demonstrate an invariance theorem: the degree of state ownership affects neither the level of socially optimal export levels nor welfare nor the level of optimal trade taxes.

Empirical applications of the Tullock contest model are rare, due in part to the non-observability of effort. This paper presents an application of the standard Tullock model in a setting where effort can be observed and explained. A simple contest model is used to predict levels of effort in...

This paper proposes a possible explanation for uniform pricing in the recorded music industry, based on a pooling equilibrium across different quality types. We show that an ex ante ability to invest in the probability of success - which we identify with record companies' A&R expenditures -...

A simple Tullock contest model is used to predict levels of effort in English professional football (soccer). The effort of the teams is reflected in the numbers of fouls committed and the numbers of yellow and red cards awarded. Effort levels are found to be higher in matches between evenly...

This paper demonstrates that technological progress in production of renewable energy can influence the extraction path of fossil fuels indirectly by a change in the equilibrium interest rate. We show in a simple model that the indirect effect can be so strong that first-period or even aggregate...

We set up a simple two-country model of tax competition where firms with different productivity decide in which location to produce and sell output. In this model a unique, asymmetric Nash equilibrium can be shown to exist, provided that countries are sufficiently different with respect to their...

This note discusses the influence of state ownership on optimal export taxes. We demonstrate an invariance theorem: the degree of state ownership affects neither the level of socially optimal export levels nor welfare nor the level of optimal trade taxes.