In this Paper we study the location behaviour of a foreign and a domestic footloose firm competing in output in the domestic product market. Both firms produce a homogenous good using a labour intensive technology. While the domestic country is unionized, the foreign country is not. Location...

We develop a model with endogeneity in key features of industrial structure linked to heterogeneous cost structures under Cournot competition. We use the model to explore issues related to cross-country differences in industry structure and the impact of globalization on markups and pricing,...

Tropical deforestation accounts for almost one-fifth of greenhouse gas emissions worldwide and threatens the world's most diverse ecosystems. The prevalence of illegal forest extraction in the tropics suggests that understanding the incentives of local bureaucrats and politicians who enforce...

Consider two sellers each of whom has one unit of an indivisible good and two buyers each of whom is interested in buying one unit. The sellers simultaneously set reserve prices and use second price auctions as rationing device. An equilibrium in pure strategies where each sellers has a regular...

We analyse an infinite-period model of duopolistic competition in a market with consumer switching costs, in which in every period new consumers arrive and a fraction of old consumers leaves. We show that prices (and profits) are higher than in a market without switching costs, and that this...

This paper proposes and solves a search unemployment model in which job separation requires mandatory notice. When jobs are subject to idiosyncratic uncertainty, firms would issue advance notice even with good business conditions. We show that such precautionary policy is not pursued if it...

Business cycles reflect changes over time in the amount of trade between individuals. In this paper we show that incorporating explicitly intra-temporal gains from trade between individuals into a macroeconomic model can provide new insight into the potential mechanisms driving economic...

We develop a model of portfolio choice to nest the views of Keynes - who advocates concentration in a few familiar assets - and Markowitz - who advocates diversification across assets. We rely on the concepts of ambiguity and ambiguity aversion to formalize the idea of an investor’s...