We study auction design when parties cannot commit themselves to the mechanism. The seller may change the rules of the game and the buyers choose their outside option at all stages. We assume that the seller has a leading role in equilibrium selection at any stage of the game. Stationary...

This paper examines the effect of competition on the irreversible investment decisions under uncertainty as a generalization of the "real option" approach. We examine this issue with reference to an industry where each firm has only one investment opportunity which is completely irreversible and...

This paper analyzes in a unified framework of a Lewis-Solow growth model the prospects for economic development of low income countries (LIC) as well as the possibility of being caught in a poverty trap and falling behind. By focussing on a technologically backward and stagnating LIC, it is...

We shed light on the function, properties and optimal size of austerity using the standard sovereign debt model augmented to include incomplete information about credit risk. Austerity is defined as the shortfall of consumption from the level desired by a country and supported by its repayment...

We consider a real business cycle model with a productive externality and an aggregate non- convex technology set µa la Benhabib and Farmer embodying capacity utilization, which exhibits indeterminacy of the steady state and multiplicity of deterministic equilibria under plausible values of the...

We present a model of elections in which interest group donations allow candidates to shift policy positions. We show that if donations were prohibited, then a unique equilibrium regarding the position choices of candidates would exist. With unrestricted financing of political campaigns two...