Hypercongestion - the phenomenon that higher traffic densities can reduce throughput - is well understood at the link level, but has also been observed in a macroscopic form at the level of traffic networks; for instance, in morning rush-hour traffic into a downtown core. In this paper, we show...

In an oligopoly, prior to competing in the market, firms have an opportunity to form pair-wisecollaborative links with other firms. These pair-wise links involve a commitment of resources andlead to lower costs of production of the collaborating firms. The collection of pair-wise linksdefines a...

In many economic and social contexts, individual players choose their partners and also decide ona mode of behavior in interactions with these partners. This paper develops a simple model toexamine the interaction between partner choice and individual behavior in games of coordination.An...

In many business transactions, in labor-management relations, in internationalconflicts, and welfare state reforms bargainers hold strong entitlements that are oftengenerated by claims that are not feasible any more. These entitlements seem to considerablyshape negotiation behavior. By using the...

Conventional economic wisdom suggests that congestion pricing would be an appropriate response to cope with the growing congestion levels currently experienced at many airports. Several characteristics of aviation markets, however, may make naive congestion prices equal to the value of marginal...

This paper studies the relevance of social interactions among the unemployed. Identification is based on a salient and selective extension of the potential duration of unemployment benefits. If social interactions are important, this policy change affects entitled individuals not only directly,...

These notes review two simple heterogeneous agent models in economics and finance. The first is a cobweb model with rational versus naive agents introduced in Brock and Hommes (1997). The second is an asset pricing model with fundamentalists versus technical traders introduced in Brock and...

A fundamental question in social sciences is how trust emerges. We provide an answer which relies on the formation of social and economic relationships. We argue that behind trust lies the fact that individuals invest in connections taking into account the potential externalities networks...