We consider the following stage game: a domestic government chooses an import quota, the a domestic and a foreign firm choose their quality level before engaging a price competition. We first show that the indirect effect of the quota on the sales of the domestic producer are different depending...

The asset market is incomplete. Fix-price equilibria exist. Price regulation Pareto improves on a competitive allocation. Prices in competitive markets may fail to attain equilibrium. The theory of general competitive equilibrium does not account for the adjustment of prices; empirical evidence...

This paper is a study of money in overlapping generations models with cash-in-advance constraints. We first offer a brief review of different features of cash-in-advance constraint. Then we propose a general formulation and study the neutrality of money. We show that both neutrality and...

This study addresses two questions: where does price discovery occur for internationally-traded firms and ho do international stock prices adjust to an exchange rate shock ?These questions are answered by analyzing quotes originating in New York and Frankfurt for three large German firms,...

In this paper we consider a model of oligopolistic competition where firms make a two-dimensional product line decision. They choose a location in style space, thus, inducing horizontal differentiation, and produce different qualities (a product line) of a given good (vertical differentiation),...

In market games the one to one correspondence between commodity types and trading posts would be justified if it were true that the set of equilibria is not affected by the number of trading posts postulated at the ouset of the model. We show that this is not true.

We study a general model of common-value second-price auctions with differential information. We show that one of the bidders has an inform tion advantage over the other bidders if and only if he possesses dominantstrategy. A dominant strategy is in fact unique and is given by the conditional...

We show that in a duopoly operating in a congested market, with a general congestion function and an arbitrary distribution of consumer disutility for congestion, there cannot exist an asymmetrict Nash equilibrium. We also show tha whenever an equilibrium does exisq it is unique. Closed...

The paper defines a simple tatonnement process of adjustments in prices and quantities, where excess demand results in nominal price increases and excess supply results in quantity rationing of supply at unchanged prices. Under reasonable assumptions, the process converges to a...

A two-stage game is used in this paper to model a long-run market with spatially separated producers and with multi-period demands: first, firmas simultaneously and independently invest their capacities; second, after capacities are set up in the first stage and made public, firms engage in a...