It is now a few years since the introduction of the common currency, and Europe is still experiencing high unemployment. The conventional logic attributes this problem to strong trade unions and other flaws in the labour market. This article takes a different approach. Using a game theoretic...

In many markets, consumers need to sign advance contracts with upfront fees and usage-based payments. Yet they may value consumptions inconsistently over time. They tend to overconsume temptation goods (e.g., credit cards), but underconsume aversion goods (e.g., gym visits), relative to initial...