A cornerstone of game theory is backward induction, whereby players reason backward from the end of a game in extensive form to the beginning in order to determine what choices are rational at each stage of play. Truels, or three-person duels, are used to illustrate how the outcome can depend on...

We present a general equilibrium optimizing model in which we study the joint effects of centralization of wage setting and central bank conservatism on economic performance. Several striking conclusions emerge. IN relatively centralized labor markets employment and output are decreasing, and...