This paper derives Abreu's (1986) stick-and-carrot strategy optimal penal codes in a partial equilibrium model that has been widely used to examine trade liberalization. Unless the asymmetry between countries is significant, the optimal penal codes take simple form. It is also shown that the...

We use a version of the small-union Meade model to consider the effects of interdependent import tariffs in the presence illegal immigration. First, we analyze the condition under which illegal immigration is likely to increase (or decrease) in response to reciprocal trade liberalization between...

Why are empirically observed tariffs so much lower than theoretically calculated Nash-equilibrium tariffs? We argue that this gap can be narrowed by using a dynamic model instead of a static model. This approach has two advantages. (i) It allows us to take account of the transitional process...

This paper proves that Nash's exchange theory leads to inefficiency. Instead of coming to a vertex, the exchange leads to polarization. This paper questions Nash's method of exchange and suspects that his theory is not about bargaining

Nash (1950) proposes a bargaining theory. This paper proves that Nash's theory leads to unfair result. The reason for the wrong conclusion is his use of utility. This paper then recommends the old Jewish method described in Talmud for fairer solution