We study the profitability incentives of merger and the endogenous industry structure in a strategic trade policy environment. Merger changes the strategic trade policy equlilibrium. We show that merger can be profitable and welfare enhancing here, even though it would not be profitable in a...

We consider a general equilibrium model where groups operating in a competitive market environment can have several members and make efficient collective consumption decisions. Individuals have the option to leave the group and make it on their own or join another group. We study the effect of...

We examine how emission taxes should be refunded to firms in order to create optimal incentives to invest in cleaner technologies. Since refunds cannot be made dependent on investments, an alternative way is to give back taxes to firms according to market shares. We show that universally...

In this paper we examine how individuals should be treated with respect to taxes, subsidies and agenda setting in constitutions in order to obtain efficient allocations of public goods and to limit tax distortions. We show that if public goods are socially desirable, the simple majority rule as...

In this paper we introduce flexible majority decision rules where the size of the majority depends on the proposal made by the agenda setter. Flexible majority rules can mitigate the disadvantages of democracies in the provision of public projects. In many cases, the combination of the...

We examine long-run treaties for mitigating climate change. Countries pay an initial fee into a global fund that is invested in long-run assets. In each period, part of the fund is distributed among the participating countries in relation to the emission reductions they have achieved in this...

We integrate individual power in groups into general equilibrium models. The relationship between group formation, resource allocation, and the power of specific individuals or particular sociological groups is investigated. We introduce, via an illustrative example, three appealing concepts of...

Collective consumption decisions taken by the members of a household may prove inefficient. The impact on market performance depends on whether household inefficiencies are caused by inefficient net trades with the market or by inefficient distribution of resources within households. Inefficient...

We examine whether and how democratic procedures can achieve socially desirable public good provision in the presence of profound uncertainty about the benefits of public goods, i.e., when citizens are able to identify the distribution of benefits only if they aggregate their private...