We examine whether an economy can have a bad (small or no formal sector, high taxes) as well as a good (small or no informal sector, low taxes) equilibrium. When the government maximizes instantaneous formal sector welfare, this can occur if the elasticity of average to marginal cost for the...

We examine an incentive scheme for a group of agents, where all agents are rewarded if the group meets its target. If the group does not meet its target, only the agents that meet their individual target are rewarded. In environmental policy, the EU burden sharing agreement and the UK Climate...

This paper compares emissions trading based on a cap on total emissions (permit trading) and on relative standards per unit of output (credit trading). Two types of market structure are considered: perfect competition and Cournot oligopoly. The e?ect of combining the two schemes is also...

The issue of economic governance is highly discussed pertaining to the question of industrialisation of a country, yet the literature on international trade and foreign direct investment (FDI) hardly pays attention to this aspect. We show that higher investment in economic governance attracts...

This paper considers the e¤ects of di¤erent labour unionisation structure (viz., decentralised and centralised unions) on product innovation. Although the presence of labour unions reduces the incentive for product innovation compared to the situation with no labour union (or if the unions...

Although empirical evidence shows that higher product market competition increases unionized wage, the theoretical literature did not pay much attention to this aspect. We show that the positive relation between product market competition and unionized wage may occur in the presence of external...

It is usually believed that higher competition, implying more active firms, benefits consumers and encourages the antitrust authorities to foster competition. We show that this view can be misleading, and higher competition may actually make the consumers worse-off. We suggest that the antitrust...

It is generally believed that higher competition benefits consumers, and encourage the antitrust authorities to foster competition. We show that this view can be misleading in the presence of welfare-maximising nationalised firms. Using a simple model with a nationalised firm, we show that entry...

Despite the important insights it has provided, technology licensing literature remains restrictive by not allowing government policies. We show that in the presence of strategic tax policies, an outside innovator and, more interestingly and in contrast to the existing works, the consumers are...

This paper studies the role of separation of ownership and management in determining the welfare implications of entry in oligopolistic markets. We show, in the presence of managerial incentive schemes with cost asymmetry, that entry is socially insufficient unless scale economies are very...