We propose a profit-sharing rule that maximizes sustainability of cartel agreements. This rule is such that the critical discount factor is the same for all the firms. If a cartel applies this rule, then asymmetries among firms may not hinder collusion (contrarily to the typical finding in the...

This paper proposes a general framework to study the sustainability of collusion in markets where demand growth (although deterministic) is not restricted to occur at a constant rate and may trigger future entry. It is shown that, typically, entry occurs later along the collusive path than along...

We study competition between two shopping centers (department stores or shopping malls) located at the extremes of a linear city. In contrast with the existing literature, we do not restrict consumers to make all their purchases at a single place. We obtain this condition as an equilibrium...

We introduce a two-period economy with asymmetric information about the state of nature that occurs in the second period. Each agent is endowed with an information structure that describes her (incomplete) ability to prove whether or not a state has occurred. We show that if the number of states...

A free daily newspaper distributes news to readers and sells ad-space to advertisers, having private information about its audience. For a given number of distributed copies, depending on the type of audience (favorable or unfavorable), the newspaper may either have a large readership or a small...

We consider a version of the intertemporal general equilibrium model of Cox et al. (Econometrica 53:363–384, <CitationRef CitationID="CR10">1985</CitationRef>) with a single production process and two correlated state variables. It is assumed that only one of them, Y <Subscript>2</Subscript>, has shocks correlated with those of the economy’s output rate...</subscript></citationref>

We derive a closed-form solution for the price of a European call option in the presence of ambiguity about the stochastic process that determines the variance of the underlying asset’s return. The option pricing formula of Heston (Rev Financ Stud 6(2):327–343, <CitationRef CitationID="CR43">1993</CitationRef>) is a particular case of...</citationref>

We study competition between two shopping centers that sell the same set of goods and are located at the extremes of a linear city, without restricting consumers to make all their purchases at a single place. In the case of competition between a shopping mall (set of independent single-product...

This paper studies exchange economies in which agents have differential information about the goods that the other agents bring to the market. To study such a setting, it is useful to distinguish goods not only by their physical characteristics, but also by the agent that brings them to the...

We extend an analytically solvable core-periphery model by introducing a monopolistically competitive sector of non-tradable goods that is mobile across regions. We find that when the elasticity of substitution among non-tradable goods is very low, there is agglomeration of all the production...