The diffusion of two competitive, interchangeable, and durable goods is studied under the framework of a spatial game where consumers are distributed on a two-dimensional square lattice and play 3$\times$3 symmetric coordination-like games with their nearest neighbors. There are three...

In this paper we argue that authorities aid cooperation by means of direct coordination or the enforcement of pre-commitment devices such as contract laws.Credible threats of violence allow this role. In a local interaction model, an authority forms if mutually connected individuals with...

In this paper we consider the way in which authorities arise in response to the need for coordination. In a model of local interaction, an authority is understood as a self-enforcing coordination selection structure, where the threat of violence ensures compliance. Such authorities form if...

This paper examines optimal social linkage when each individual's repeated interaction with each of his neighbors creates spillovers. Individuals differ across rates of time preference. A planner must choose a local interaction system or neighborhood design before observing the realization of...

We consider a local interaction model with a population on an h dimensional torus, in which in each round of play a random player gets a learning draw. This player plays a k+1 action stage game with players in his neighborhood, compares his own average payoff with the average payoff of the...

We derive fundamental new theory for measuring monetary service flows aggregated over countries within a multicountry economic union. We develop three increasingly restrictive approaches: (1) the heterogeneous agents approach, (2) the multilateral representative agent approach, and (3) the...

We derive fundamental new theory for measuring monetary service flows aggregated over countries within the European Monetary Union (EMU). We develop three increasingly restrictive approaches: (1) the heterogeneous agents approach, (2) the multilateral representative agent approach, and (3) the...

This paper examines the mutually reinforcing interactions between exchange rate dynamics and technical trading strategies. I first show that technical trading systems have been quite profitable during the floating rate period. This profitability stems from the successful exploitation of...