This Paper studies the formation of opening prices for German and French stocks, simultaneously traded in Frankfurt and Paris. We analyse theoretically the case where investors and traders based in the same country as the firm have better information on its value than foreign traders. Our model...

We examine a Stackelberg game where a financially constrainedleader faces competition from a ‘deep pocket’ follower. We analyzethe consequences of this trade-off between a financial and a strategicadvantage for both the design of financial contracts and market structure.We derive conditions...

...We rely on Matsuyama (1996, 1999) to study the effects on growth and welfareof non distortive tax/subsidy policies. In particular, we are interested ininvestigating the stabilising/destabilising effects of policies aimed at eliminatingeconomic fluctuations. The focus on stabilisation...