When risks are interdependent, an agent's decision to self-protect affects the loss probabilities faced by others. Due to these externalities, economic agents invest too little in prevention relative to the socially efficient level by ignoring marginal external costs or benefits conferred on...

Unanimous voting as the fundamental procedural source of political legitimacy grants vetopower to each individual. We present an axiomatic characterization of a class of biddingprocesses to spell out the underlying egalitarian values for collective projects of a“productive state”. At heart...

This paper provides a systematic welfare-based approach to analyze the impact of non-tariffmeasures (NTMs) on trade and welfare in presence of market imperfections. We focus onstandard-like measures such as technical barriers and sanitary and phytosanitary regulations.The approach overcomes the...

Interdependencies in consumer behavior stem from either status-seeking consumption orcompliance with social norms. This paper analyzes how a consumption act changes froma means to signal the consumer’s status to a means of norm compliance. It is shown thatsuch a transformation can only be...

Many researchers have found game theory a useful method for analyzing internationalenvironmental problems. However, game theory has been criticized for being too theoretical,abstracting from too many practical problems and being based on very specific assumptions.This article tries to qualify...

The paper sheds light on the impact of spatial agglomeration of humancapital on individual wages in Western Germany. Using panel data itshows that regional wage differentials are to a large extent attributableto localized human capital externalities arising from the regional share ofhighly...

This paper provides an analytical framework for exploring the relationshipbetween equity and efficiency for two riparians sharing a transboundary river.Decreasing marginal productivities of water make a noncooperative approach inefficientwhen water is scarce. If the upstream riparian uses its...

This paper presents a framework for analysing the effects of economicdevelopment in Eastern Europe on Austria's regions. Therefore we concentrate on the effects of enhanced East-West trade, which results from the economic development in the transition countries.

The model of compensating differentials in regional labor markets was developed by Roback(1982). The model interprets regional differences in constant quality wages and rents ascompensating firms and residents for inter-regional differences in amenities. The modelassumes that the costs of...

We examine the role of spatial proximity for Venture Capital (VC) investments inGermany. The main database is a survey of 85 personal interviews withrepresentatives of different types of financial institutions. The analysis shows thatspatial proximity is far less important for VC investments...