Economists have focused on job search and supply-side explanations for network effects in labour transactions. This paper develops and tests an alternative explanation for the high prevalence of network-based labour market entry in developing countries. In our theoretical framework, employers...

This paper examines the effect on relative wages when FDI occurs from the North to the South. The Northern firms undertake FDI to take advantage of the lower wage of unskilled labor in the South. The key assumption is that FDI from North to South occurs in an unskilled labor intensive production...

In the strategic trade policy literature, the firms typically make positive profits at equilibrium policy levels. We show that this is not always true when firms from the developed (North) and developing (South) countries compete in the Northern market. In particular, the South firm may be...

Majority of the trading blocs to date are between similar countries, rather than between developed and developing countries. This paper provides a rationale for why trading blocs among similar countries may arise as an equilibrium phenomenon. It develops a model of an asymmetric world economy,...

We study mechanism design in quasi-linear environments when there are two alternatives. We show that under a mild range condition, every implementable deterministic allocation rule is a generalized utility function maximizer. In unbounded domains, if we replace our range condition by an...

We provide axiomatic characterizations of two natural families of rules for aggregating equivalence relations: the family of join aggregators and the family of meet aggregators. The central conditions in these characterizations are two separability axioms. Disjunctive separability, neutrality,...

Using a unique household panel data set for rural India covering the years 1993/1994 and 2004/2005 we test a key theoretical assertion of caste and its effects, namely that marginalised social groups fare worse in terms of income levels when resident in villages dominated by upper castes. We...