By bridging the gap between the strategic model of sanctions and the public choice framework of sanctions, we introduce a new sanctions game. Contrary to an earlier finding, we show that the partial compliance of the target country along with mild sanctions are not only equilibrium, but also...

It is well known that high tariffs tend to induce direct foreign investment (DFI) by encouraging the investors to jump the “tariff-wall”. We argue that in the presence of a “tough” local competitor DFI may not be possible but suitable designed joint-ventures (JV) between the local and...

We present a model that allows us to compare the effects that frictions involved in immigration and international outsourcing have on the skilled-unskilled wage inequality. We show that, for any given level of contractual friction in the production of intermediate goods, the wedge between the...

We construct a model whereby stock exchanges take a new role as an information intermediary, notably absent in their roles. We show that exchanges differentiate themselves at subgame perfect equilibrium and will not race to the top or the bottom.

We first construct three measures of the expected damage from the unintentional introduction of alien species into a country called Home. We then focus on four market structures. First, perfect competition prevails in both Home and Foreign and Home is a small country. Second, the Home and the...

We study the impacts of terms trade changes on absolute and the real wages of skilled and unskilled labor and their gaps for an economy specialized in export production. We show an interesting result where wage behavior as well as the skilled-unskilled wage gap depend on elasticity of import...