Two main results have been obtained on the literature on contractual solutions to the hold-up problem. First, a contract specifying a price and quantity of the final good to be traded will, fairly generally, induce efficient investments if these are `selfish' in nature, i.e., each party's...

Networks and Farsighted Stability By Frank H. Page, Jr. Department of Finance University of Alabama Tuscaloosa, AL 35487 USA fpage@cba.ua.edu Myrna H. Wooders Department of Economics University of Warwick Coventry CV4 7AL UK M.Wooders@warwick.ac.uk Samir Kamat Portfolio Management Group Wachovia...

In this paper we study hedonic games where each player views every other player either as a friend or as an enemy. Two simple priority criteria for comparison of coalitions are suggested, and the corresponding preference restrictions based on appreciation of friends and aversion to enemies are...

This paper models individual choices of social groups and the formation of group identity, and examines the conditions with which the group identity reinforces the productivity of individuals. A social group is defined as a network that provides with a market for interactions to its members....

We consider competitive bidding for a business license, via an open ascending-price auction, between two symmetric incumbents and a potential entrant, each of whom is privately informed about her own valuation of the license. Entry stands to reduce the payoff of each incumbent below that in...

Existence of monotone pure strategy equilibrium is established in the discriminatory and uniform S + a-th price (a in [0, 1]) auctions of S identical objects when bidders are risk-neutral with independent signals. The model requires discrete price / quantity grids and allows for...

This paper reinterprets the gamma-core (Chander and Tulkens (1995, 1997)) and justifies it as well as its prediction that the efficient coalition structure is stable in terms of the coalition formation theory. It is assumed that coalitions can freely merge or break apart, are farsighted (that...

It is wellknown that a group of individuals contributing to a joint production process with diminishing returns will tend, in equilibrium, to put in too little effort if shares of the output are exogenous, and will put in too much effort if their shares are proportional to their inputs. We...

Based on the critical assumption of strategic complementarity, this paper builds a general model to describe and solve the screening problem faced by the monopolist seller of a network good. By applying monotone comparative static tools, we demonstrate that the joint presence of asymmetric...

This paper explores the link between an environmental policy and economic growth employing an extension of the Neoclassical Growth Model. We include a state equation to renewable natural resources, and consider natural resources as a component of the aggregate productivity. It is assumed that...