Employing a political-economics approach, this paper compares small states and unions when the former fail to internalize cross-border externalities of publicly provided goods. It discusses two types of unions: federations with more than one level of government and unitary states. While unitary...

Information has played a central role in understanding why international negotiations may break down into costly conflict. Barring indivisibilities or commitment problems, the literature finds that war can only occur between rational unitary actors because of private information about...

In a society composed of citizens and a dictator: what are the conditions for a successful citizens' revolt? What kind of strategies do governments follow to prevent such revolts? In this paper we argue that the concept of networks is a very powerful tool to understand these issues, as shown...

In the last two decades, terrorism has become a major issue around the world. We analyze a conflict between a terrorist (Terrorist) and a passive defender (Defender) using a simple game theoretical model. Defender is passive as her actions can only influence the costs (damages) when Terrorist...

This paper focuses on botnet economics and design of defensive strategies. It takes the view that by combining scarce information on the attackers’ business models, with rational economic analysis of these business processes, one can identify design rules for economic defense mechanisms which...

In a society composed of a ruler and its citizens: what are the determinants of the political equilibrium between these two? This paper approaches this problem as a game played between a ruler who has to decide the distribution of the aggregate income and a group of agents/citizens who have the...

This paper examines capital tax competition in the presence of an interstate transfer policy without federal commitment. Lack of commitment implies that tax policy is chosen prior to federal transfers. The paper s main result is that ex-post federal policy internalizes horizontal fiscal...

The U.K.'s decision to leave the EU and the voting in of the protectionist Donald Trump to the US presidency has drawn both the UK and the USA into the Nash Trap.U.S. mathematician John Nash (the movie ‘A Beautiful Mind') postulated that Adam Smith's declaration that ‘In competition,...

This paper examines capital tax competition in the presence of an interstate transfer policy without federal commitment. Lack of commitment implies that tax policy is chosen prior to federal transfers. The paper's main result is that ex-post federal policy internalizes horizontal fiscal...