In this paper we present an analytical framework to study the demands of foreign and domestic factors of production of the maquiladora industry. We derive the net profitability of demanding high instead of low quality inputs. We argue that differences in the quality of inputs between foreign and...

The article merges aspects of alliance theory with bargaining theory and mechanism design. Illustrated with a numeric example, it models a within-alliance neutral agency whose purpose it is to propose an efficient level of public good provision for the alliance as a whole and suggests a...

The remarkable increase in the use of economic sanctions as a coercive tool of foreign policy over the past quarter century has been accompanied by an equally rapid growth in the number of academic and policy studies, which most often aim at quantifying the economic effects of sanctions and/or...

In this article, we use a stylized model of the labor market to investigate the effects of three alternative and well-known bargaining solutions. We apply the Nash, the Egalitarian and the Kalai-Smorodinsky bargaining solutions in the small firm's matching model of unemployment. To the best of...

The paper considers a one-to-one matching with contracts model in the presence of price controls. This set-up contains two important streams in the matching literature, those with and those without monetary transfers, as special cases and allows for intermediate cases with some restrictions on...

Studies have shown that small-scale agricultural producers from developing countries do not generally obtain the potential gains of trade. To investigate what can be done to help them get better prices, we examine ways to increase their bargaining power. Using data from 1,854 cocoa transactions...

The infinitely repeated prisoners' dilemma has a multiplicity of Pareto-unranked equilibria. This leads to a battle of the sexes problem of coordinating on a single efficient outcome. One natural method of achieving coordination is for the players to bargain over the set of possible equilibrium...

In this note we study a take-it-or-leave-it bargaining procedure between two risk neutral individuals engaged in the joint stochastic production of a commodity. Each individual has to exert effort, that is, to provide a one-dimensional input which is unobserved to the other individual. The...