We develop a model of favor exchange in a network setting where the cost of performing favors is stochastic. For any given favor exchange norm, we allow for the endogenous determination of the network structure via a link deletion game. We characterize the set of stable as well as equilibrium...

This article proposes a general regime-switching univariate diffusion model to describe the dynamics of the short-term interest rate. The maximum likelihood estimates are obtained using the weekly series of U.S. three-month treasury bill rates. The estimation results reveal that there are strong...

The aim of this paper is to find approximate log-transition density functions for multivariate time-inhomogeneous diffusions in closed form. There are many empirical evidences supporting that the data generating process governing dynamics of many economics variables might vary over time because...

We investigate the asymptotic validity of the bootstrap for Durbin-Wu-Hausman (DWH) tests of exogeneity in linear IV regressions, with or without identification. Our analysis of the properties (size and power) of the proposed bootstrap tests provides some new insights and extensions of earlier...

The presence of illegal, unregulated and unreported (IUU) fishing activities is considered a serious barrier to the sustainable use of marine resources. This paper uses a game theoretic approach to investigate the strategic interaction between fishers and management in the presence of IUU...

We focus on the classical linear simultaneous equations models and study the sensitivity to instrument endogeneity of six alternative versions of Durbin-Wu-Hausman (DWH) tests of exogeneity. To address this issue, we consider two setups for instrument endogeneity: (i) fixed instrument...

This paper employs two stage data envelopment analysis (DEA) to investigate the efficiency effects of removing trade barriers on banking performance for a sample of Asian developing economies over the period 1997-2006. First, the DEA is employed to estimate the efficiency scores of banks. After...