We describe a vertically differentiated market where firms choose between activating either independent ventures leading to distinct product qualities, or a joint venture for a single quality. Then, firms either repeat the one-shot Nash equilibrium forever, or behave collusively, according to...

The end of the Cold War and the apparent stability of the contemporary international system, in which the probability of a major war is at its lowest for centuries, have spurred a lively debate on the causes of peace. One of the most popular explanations is based on the classic liberal statement...

In this paper we take a close look at those strategic incentives arising in a situation where firms share the costs and profits in a multi-firm project, and bargain for their respective (precommitted) split of cost- and profit-shares. We establish that, when each firm's effort contribution to...

We analyse the problem of the choice of the market variable in a model where firms activate R&D investments for process innovation. We establish that (i) firms always choose the Cournot behaviour; and (ii) there exists a set of the relevant parameters where a benevolent social planner prefers...

Extensive literature notwithstanding, effects of the size distribution of firms on consumers' surplus and on social welfare leaves room for further exploration. In this paper we discover that size distribution imposes two counter-balancing effects on aggregate surplus of the industry : [i] even...

The monopolist's incentives towards product and process innovations are evaluated against the social optimum. The main findings are that (i) the incentive to invest in cost-reducing R&D is inversely related to the number of varieties being supplied at equilibrium, under both regimes; (ii)...

This paper examines the equivalence among price-modifying and quantity fixing international trade policies in a differential game. We employ two well known capital accumulation dynamics for firms, due to Nerlove and Arrow and to Ramsey, respectively. We show that, in both cases, open-loop and...

We investigate a dynamic oligopoly game with price adjustments. We show that the subgame perfect equilibria are characterised by larger output and lower price levels then the open-loop solution. The individual (and industry) output at the closed-loop equilibrium is larger than its counterpart at...

Equally, poor countries display similar compulsory schooling laws but different levels of child labor and school attendance. This paper provides an explanation for the existence of child labor, which relies on the imperfect enforcement of compulsory schooling laws and is consistent with the...

I compare in-kind reimbursement and reimbursement insurance. I explicitly consider outpatient and inpatient care in a model where illness has a negative impact on labor productivity. Consumers are heterogeneous with respect to intensity of preferences for treatment which is their private...