This paper proposes two models in which price stickiness arises endogenously even though firms are free to change their prices at zero physical cost. Firms are subject to idiosyncratic and aggregate shocks, and they also face a risk of making errors when they set their prices. In our first...

If buyers do not observe the quality of a product and production of quality is costly, market allocations can be very inefficient. Certification intermediaries are institutions that provide information about quality to buyers. The amount of information in the market determines the incentives...

We consider a partnership game with two roles in which a large population of firms interact to carry out, say, R&D joint ventures. The partners have to build a common-property asset through a sequence of costly investments. Firms have access to a monitoring technology whose cost depends on the...

Since the framework convention of Rio, actual environmental negotiations on climate change aim at inducing all world countries to sign global environmental agreements to reduce greenhouse gas emissions. Despite the past unsuccessful attempts, even current negotiations seem to pursue the same...

In this paper an n-player non-co-operative game is used to model countries' decision of whether or not to sign an international agreement on climate change control. The stable coalition structure of the game is defined and then computed for a climate game in which the role of carbon leakage is...

In this paper, the reaction of firms to the introduction of environmental charges in a given industry is analysed. Firms may decide either to relocate their plants abroad or to adopt a new environmental-friendly technology. The latter can be either developed by investing in R&D or obtained by...

In this paper a simple model is used to analyse the strategic behaviour of countries that bargain over CO2 emission reductions. Five main world regions are considered and their incentives to sign an international agreement on climate change control are analysed. A non-cooperative approach to...

This paper provides a co-operative as well as a non-cooperative analysis of weighted majority games. The co-operative solution concept introduced here, the Stable Demand Set, yields a meaningful selection within the Mas-Colell Bargaining Set, it contains the Core, it eliminates the "dominated"...

Consider an environment with widespread externalities, and suppose that binding agreements can be written. We study coalition formation in such a setting. Our analysis proceeds by defining on a partition function an extensive form bargaining game. We establish the existence of a stationary...

The literature of welfare-maximising greenhouse gas emission reduction strategies pays remarkably little attention to equity. This paper introduces three ways to consider efficiency and equity simultaneously. The first method, inspired by Kant and Rawls, maximises net present welfare, without...