The authors take a simple, well-known macroeconomic model and treat it as a gam e between two players-the government and an all-embracing union. The payoffs have the form of a prisoner's dilemma. The equilibrium outcom e produces unwanted inflation and is not Pareto optimal. This is desp ite the...

We explore the problem of network interconnection in local telecommunications. We develop a model with a competitive business sector and a regulated residential sector. The model is used to analyze the celebrated New Zealand antitrust case between Clear and Telecom. We discuss implications of...