Classical theories of exchange rates, such as Mint Par and Purchasing Power Parity (PPP), have the desirable property that they define a network of exchange rates in which no profit by 'compound arbitration' or 'cyclic arbitrage' is possible. Conversely, it will be shown that any network of...

This paper looks at connections between Renegotiation Proof Equilibrium sets for finitely and infinitely repeated games. We look at the Benoit and Krishna (1993) definition of renegotiation proof sets for discounted finitely repeated games. We focus on the long run behaviour of these sets for...

Classical theories of exchange rates, such as Mint Par and Purchasing Power Parity (PPP), have the desirable property that they define a network of exchange rates in which no profit by 'compound arbitration' or 'cyclic arbitrage' is possible. Conversely, it will be shown that any network of...

The paper analyses a simple Rubinstein-type bargaining model in which there is no discounting and the cake decays over time at a positive rate. As a consequence, outside options enter players' unique Perfect Equilibrium payoffs. It is then shown that these payoffs, when the interval between two...

The standard algebra of experessing knowledge and common knowledge in game theory is critically examines. It is argued that this algebra is flawed because it assumes implicitly that information partitions of individuals are common knowledge, and that all individuals know all the truths of...

This paper studies optimal experimentation by a monopolist who faces an unknown demand curve subject to random changes, and who maximises profits over an infinite horizon in continuous time. We show that there are two qualitatively very different regimes, determined by the discount rate and the...

We propose a new bankruptcy procedure that makes use of multiple auctions. The procedure is designed to work even when capital markets do not function well (for example, in developing economies, or in economies in transition) - although it can be used in all economies.

This paper analyses optimal irreversible investment policy when profits are subject to a multiplicative geometric Brownian motion shock. The marginal product of capital is increasing initially and decreasing thereafter. In the latter range, optimal policy is familiar: capacity is added gradually...

This paper studies the impact of lobbying on political competition and policy outcomes in a framework which integrates the citizen-candidate model of representative democracy with the menu-auction model of lobbying. Positive and normative issues are analysed. On the positive side, lobbying need...