A pairwise random matching game is considered to identify the social environments that give rise to the social custom and fashion cycles. The game, played by Conformists and Nonconformists, can generate a variety of socially stable behavior patterns. In the path-dependence case, Conformists set...

This paper considers a simple pairwise random matching game in the society populated by two groups of agents: Conformists and Nonconformists. Depending on the relative frequencies of intergroup and intragroup matchings, the best response dynamics show three types of asymptotic behaviors: global...

We propose a new approach to model costly international trade, which includes the standard approach, the “iceberg” transport cost, as a special case. The key idea is to make the technologies of supplying the good depend on the destination of the good. To demonstrate our approach, we extend...

One critical aspect of economic development is that productivity growth and a rising standard of living are realized through more roundabout methods of production and increasing specialization of intermediate inputs and producer services. We use an extended version of the Judd-Grossman-Helpman...

In recent years, monopolistic competition models have frequently been applied in macroeconomics, international and interregional economics, and economic growth and development. In this paper, I presenta highly selective review in this area, with special emphasis on the complementarity and its...

This paper develops an infinitely-lived representative agent economy, in which the relative contribution of the two engines of growth, investment and innovation, changes endogenously over time. The balanced growth path of the economy loses its stability when its endogenously determined growth...