Suppose agents can exert costly effort that creates nonrival, heterogeneous benefits for each other. At each possible outcome, a weighted, directed network describing marginal externalities is defined. We show that Pareto efficient outcomes are those at which the largest eigenvalue of the...

Entitlement programs have become an increasing component of total government spending in the US over the last six decades. To some observers, this growth of the welfare state is excessive and unwarranted. To others, it is a welcome counter-acting force to the rapid increase in income inequality....

We examine a monopolistic supplier's decision about a pure public good when he/she must negotiate with beneficiaries of the good. In our model, while the level of the public good is decided unilaterally by the supplier, the cost share of the public good is negotiated between the supplier and...

We consider ultimatum bargaining over the provision of a public good. Offer-maker and responder can delegate their decisions to agents, whose actual decision rules are opaque. We show that the responder will benefit from strategic opacity, even with bilateral delegation. The incomplete...

This paper analyzes fairness and bargaining in a dynamic bilateral matching market. Traders from both sides of the market are pairwise matched to share the gains from trade. The bargaining outcome depends on the traders’ fairness attitudes. In equilibrium fairness matters because of market...

This paper analyses the role of ratification quotas in multilateral agreements over emission reduction. The higher is the quota, the lower is the level of emissions in case the agreement comes into force, but the higher is also the risk of failure. In a setting with incomplete information, two...

This paper demonstrates that cooperation in international environmental negotiations can be explained by preferences for equity. Within a N-country prisoner's dilemma in which agents can either cooperate or defect, in addition to the standard non-cooperative equilibrium, cooperation of a large...

This paper demonstrates that cooperation in international environmental negotiations can be explained by preferences for equity. Within a N-country prisoner's dilemma in which agents can either cooperate or defect, in addition to the standard non-cooperative equilibrium, cooperation of a large...

A profit-maximizing public good supplier endogenously determines the level of the public good and simultaneously negotiates with beneficiaries of the good one by one. A pre-negotiation commitment on the production level of the public good by the supplier enhances the internalization of...