In this paper, we consider a population of individuals who differ in two dimensions: their risk type (expected loss) and their risk aversion. We solve for the profit maximizing menu of contracts that a monopolistic insurer puts out on the market. First, we find that it is never optimal to fully...

In this paper we analyze a model of proportional representation that allows for both sincere and strategic voting. We prove that strategic voters vote only for the extreme parties in any equilibrium,if the electorate is large.

In this paper, we analyze the trade war between two large countries when the trade policy is decided through majority voting. We show how the trade war equilibrium depends on the median voter production factor relative endowment. We compare this equilibrium to the one analyzed by Johnson where...

In this note, we consider a negotiation model wherein a simultaneous voting game, which endogenizes the choice of the bargaining procedur, is introduced.

The citizen-debate approach, proposed to study the performance of representative democracies, builds on a multi-stage game where the same agents are asked whether or not to become a candidate and, successively, to vote. Consistently, the solution concept adopted in Besley and Coate (1997)...

This paper provides a general overview of the literature on the core of an exchange economy with asymetric information. Incentive compatibility is emphasized in studying core concepts at the ex ante and the interim stage.The analysis includes issues of non emptiness of the core as wellas core...

We consider the effect of asymmetric information on price formation process in a financial market where private information is held by a market maker. A Bayesian game is proposed in which there is price competition between two market makers with two different information partitions. At each...

A country consists of two non-overlapping regions, each ruled by a local authority. The federal government plans to construct a facility in one of the regions. If the facility is constructed, it generates a social value in the host region and has spillover effects in the rest of the country. The...

In this paper we consider the problem of regulating an open access essential facility. A vertically integrated firm owns an essential input and operates on the downstream market under the roof of a regulatory mechanism. There is a potential entrant in the downstream market. Both competitors use...

Using the standard non linear income and commodity taxation framework this paper examines the optimal policy to be adopted when the same labor disutility can receive two opposite interpretations: taste for leisure and activity limitation. In the absence of complete information about individual...