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The literature has identified that countries with higher levels of openness tend to present a larger government sector … as a way to reduce the risks to the economy that openness entails. This paper argues that there are a number of policies … between openness and the size of government might be mediated by the quality of its public sector. While countries with weak …
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Community enforcement is an important device for sustaining efficiency in some repeated games of cooperation. We investigate cooperation when information about players' reputations spreads to their future partners through links in a social network that connects them. We find that information...
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We discuss the existence of a pooling equilibrium in a two-period model of an insurance market with asymmetric information. We solve the model numerically. We pay particular attention to the reasons for non-existence in cases where no pooling equilibrium exists. In addition to the phenom- enon...
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In many cases consumers cannot observe firms' investment in quality or safety, but have only beliefs on the average quality of the industry. In addition, the outcome of the collective investment game of the firms may be stochastic since firms cannot control perfectly the technology or external...
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This article deals with the issue of entry into an industry where firms share a collective reputation. First, we show …
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