In this paper we propose to use Polya urn processes to model the emergence of conformity in an environment where people interact with each other sequentially and indirectly, through a common physical facility. Examples include rewinding video tapes, erasing blackboards, and switching headlights,...

We endogenize the threshold points in Granovetter’s threshold model of collective behavior (Granovetter 1978). We do this in a simple model that combines strategic complementarity and private information in a dynamic setup with endogenous order of moves. Looking at Granovetter’s model in the...

We study the strategic behavior of voters in a model of proportional representation, in which the policy space is multidimensional. Our main finding is that in large electorate, under some assumptions on voters'preferences, voters essentially vote, in any equilibrium, only for the extreme parties.

This paper shows that generators exercised increasing market power in the England and Wales wholesale electricity market in the second half of the 1990s despite declining market concentration. It examines whether this was consistent with static, non-cooperative oligopoly models, which are widely...

This paper generalises the approach taken by Dasgupta & Maskin (1986) and Simon (1989) and provides necessary and sufficient conditions for the existence of pure and mixed strategy Nash equilibrium in games with continuous strategy spaces and discontinuous payoff functions. The conditions can be...

This paper uses the complexity of non-competitive behaviour to provide a new justification for competitive equilibrium in the context of extensive-form market games with a finite number of agents. This paper demonstrates that if rational agents have (at least at the margin) an aversion for...

There has been much controversy over the merits of government regulation to protect growers and franchisees from hold-up at the hands of integrators and franchisors. Typically, economic argument have discouraged regulation, since direct evidence for hold-up is weak and bargaining should yield...

In a standard hold-up problem, individuals are vulnerable to hold-up because it is impossible to write complete contracts to cover the lifespan of relationship-specific investments. Hold-up occurs only when investments are to some degree nongeneric, and the extent of the problem increases with...

Latin America has recently experienced three cycles of capital inflows, the first two ending in major financial crises. The first took place between 1973 and the 1982 ‘debt-crisis’. The second took place between the 1989 ‘Brady bonds’ agreement (and the beginning of the economic reforms...

Rational choice models predict that political competition and political participation have opposite effects on the size of government. We investigate these theories using data from a panel of 18 Latin American countries during the 20th century. Our research builds evidence for the prediction...