We investigate the welfare effect of increasing competition in an anonymous two-sided matching market, where matched pairs play an infinitely repeated Prisoner's Dilemma. Higher matching efficiency is usually considered detrimental as it creates stronger incentives for defection. We point out,...

Rather than about absolute payoffs, governments in fiscal competition often seem to care about their performance relative to other governments. Moreover, they often appear to mimic policies observed elsewhere. We study such behaviour in a tax competition game with mobile capital à la...

We develop an evolutionary model of growth in which agents choose how to allocate their time between private and social activities. We argue that a shift from social to private activities may foster market-based growth, but also generate social poverty. Within a formal framework that merges a...

Consider a population of farmers who live around a lake. Each farmer engages in trade with his two adjacent neighbors. The trade is governed by a prisoner's dilemma "rule of engagement". A farmer's payoff is the sum of the payoffs from the two prisoner's dilemma games played with his two...