We develop a dynamic duopoly model of R&D competition to improve the quality of a finalgood. The innovation process is sequential and cumulative, and takes place alongside productionin an infinite-horizon setting. In this context we study the R&D incentive impacts resultingfrom a “research...

Faced with real and nominal shocks, what should a benevolent central bankdo, …x the money growth rate or target the inflation rate? In this paper, wemake a …rst attempt at studying the optimal choice of monetary policy in-struments in a micro-founded model of money. Speci…cally, we produce...

This paper studies equilibrium search and learning in a dynamic shing gamethat is played by independent shermen and by members of an information sharingCooperative. Once collected, information about the location of productive sh-ing sites is an excludable public good. We show that independent...

We analyze non-cooperative environmental policy when the only strategic interac-tion between countries is through bilateral transboundary pollution, i.e., countries areclosed or small open economies. When countries set pollution taxes simultaneously,there is no carbon leakage. However, in the...

Ordinarily, the process of decision making by a committee through voting is mod-elled by a monotonic game the range of whose characteristic function is restricted tof0; 1g: The decision rule that governs the collective action of a voting body induces ahierarchy in the set of players in terms of...

The core is reformulated to incorporate the externality typical in strategic formgames. Any coalition of players may deviate by trying to commit to a profile of actionsdifferent from a status quo. The outsiders of the coalition may take a coordinatedmeasure, incentive-feasibly for themselves, to...

I exploit a major structural change that has occurred in world soccer to study the impact ofincentives on outcomes in a strategic setting. A game-theoretic model is developed thatcaptures some essential strategic elements of soccer vis-à-vis the number of points awardedto a win. The observable...

The tug-o-war for supremacy between inflation targeting and monetary tar-geting is a classic yet timely topic in monetary economics. In this paper, werevisit this question within the context of a pure-exchange overlapping genera-tions model of money where spatial separation and random relocation...

We study a variant of the conventional keeping-up-with-the-Joneses setup in whichheterogeneous-ability agents care both about consumption and leisure and receive anutility premium if their consumption exceeds that of the Joneses’. Unlike the conventionalsetup in which all agents are assumed to...