We develop an incomplete contract model to analyse the enlargement strategy of a club. An applicant is characterized by his wealth and the degree of conformity with the club standard. The club gains only from a fully reformed new member, but reform is costly. The club chooses between early...

We find the Nash equilibria for monotone n-player symmetric games where each player chooses whether to participate. Examples include market entry games, coordination games, and the bar-room game depicted in the movie 'A Beautiful Mind'. The symmetric Nash equilibrium involves excessive...

This paper provides evidence that incumbents' access to group deep pockets has a negative impact on entry in product markets. Relying on a unique French data set on business groups, the paper presents three major findings. First, consistent with theoretical predictions, the amount of financial...

Europe has taken the global lead in the issuance of third generation (3G) licences for mobile telecommunications according to the UMTS/IMT-2000 family of standards. We survey the recent European UMTS licence auctions and compare their outcomes with the predictions of a simple auction model that...

We investigate how bank competition affects the efficiency of credit allocation, using a model of spatial competition. Our analysis shows that bad loans are more likely the larger the number of banks competing for customers. We study further how many banks will be active if market entry is not...

Stimulating entrepreneurship is high on the policy agenda of many countries. We study the effects of tax policies on entrepreneurs’ choice of riskiness (quality) of an innovation project, and on their mode of commercializing the innovation (market entry versus sale). Limited loss offset...

Recent studies have shown that there are significant earnings differentials between immigrants and natives in Switzerland. The goal of this paper is to determine whether these differences can be attributed to diverging socio-economic endowments or to discrimination. We use the well-known...

A number of studies have established a positive effect of migrants' language proficiency on their productivity. It has been argued that these estimates are upward-biased because of the presence of unobserved heterogeneity. To obtain an accurate estimate of language effects is important since it...

While barriers to trade in most goods and some services including capital flows have been reduced considerably over the past two decades, many remain. Such policies harm most the economies imposing them, but the worst of the merchandise barriers (in agriculture and textiles) are particularly...

We investigate the origin and evolution of the legal institution of citizenship from a political economy perspective. We compile a new data set on citizenship laws across countries of the world which documents how these institutions have evolved in the postwar period. We show that, despite a...