Differential delivery dates (D3) of contract obligations characterize most contracts in real life. D3 puts the contractor who delivers last, in the words of David Hume (1769), in “a position of advantage” because reneging on his/her obligation can be profitable. Ex-ante remedies such as...

The economic catch-up of the East Asian region went hand-in-hand with the emergence and even dominance of large quasi-state or private conglomerates. Such for example were the Zaibatsus in the pre-WWII and the Keiretsus of the post-WWII Japan and the Chaebols of South Korea which enjoyed...

We propose a formal re-definition of the concept market failure based on the idea of the imperfect state. In the Neo-classical taxonomy, a decentralized regime of exchange is a market failure if its laissez faire equilibrium solution is welfare-dominated by a technically feasible alternative. If...

The Great Recession has called into question many tenets of Neo-classical Microeconomics. Neo-classical theory allows each agent only one fixed type, homo economicus, while not denying other possible types as in adverse selection. We propose that economic agents not only choose their market...

Katz and Stark (1986) have proposed two reasons for rational workers to migrate to urban areas even when the urban expected income is lower than rural income. We propose to more, viz., scale economies in consumption and differential income variance in favor of the urban area. In each case,...

We give the conditions for the attainment of self-enforcing Pareto efficiency under complete effort non-observability, strict agent rationality and global budget balance among teams involved in a winner-takes-all contest for a prize. Employing Nash conjectures and fixed fee financing of the...

We show that (1) a social ordering on R 0 that satisfies Strong Paretoness, Invariance with respect to a Positive Proportional Transformation and Lower Semi-Continuity does not exist and (2) that a social ordering or R 0 that satisfies Weak Paretoness, Invariance with respect to an Affine...

We show that an output sharing scheme with an egalitarian bias is inconsistent with first best production level in a team with self-interested nonidentical members.

Moral is a proverbial hidden variable in models of social games. Its importance is unquestioned but it ordinarily defies operational definition. We attempt here to parameterize its role and trace how it impacts on social production and welfare in a Nash-like bargaining games. Synergy is...

We examine the three options at the policymakers disposal to pull the Philippine economy out of the currency crisis and propel it to a sustainable growth orbit: the BSP option, the incentives restructing option, and the protectionist option. In a situation of financial panic and the resulting...