This paper illustrates that an international permit trading system may hurt relatively poor countries by making associated economic activities unaffordable. A model is constructed in which the free market solution is Pareto inefficient as a result of pollution. The introduction of tradable...

The equivalence of markets and games concerns the relationship between two sorts of structures that appear fundamentally different -- markets and games. Shapley and Shubik (1969) demonstrates that: (1) games derived from markets with concave utility functions generate totally balanced games...

Bergstrom, Blume and Varian (1986) provides an elegant game-theoretic model of an economy with one private good and one public good. Strategies of players consist of voluntary contributions of the private good to public good production. Without relying on first order conditions, the authors...

We introduce a new approach to showing existence of equilibrium in models of economies with unbounded short sales. Inspired by the pioneering works of Hart (1974) on asset market models, Grandmont (1977) on temporary economic equilibrium, and of Werner (1987) on general equilibrium exchange...

We introduce a model of a local public goods economy with a continuum of agents and jurisdictions with finite but unbounded populations, where the set of possible projects for each jurisdiction/club is unrestricted in size. Under boundedness of per capita payoffs, which simply ensures that equal...

In the literature of psychology and economics it is frequently observed that individuals tend to conform in their behavior to that of similar individuals. A fundamental question is whether the outcome of such conformity can be consistent with self-interest. We propose that this consistency...

The following is an outline of the four chapters of this dissertation. Chapter 1 shows that subgame perfect equilibrium and weak perfect Bayesian equilibrium require rationality at information sets that are irrelevant for determining whether outcomes are sustained by sequentially rational play....

This dissertation is comprised of three essays. The first essay tests the empirical validity of a statistical discrimination model that incorporates employer's race. I show that if an employer statistically discriminates less against an employee that shares the same race (match) than an employee...