Economic equilibrium models have been inspired by analogies to stationary states in classical mechanics. To extend these mathematical analogies from constrained optimization to constrained dynamics, we formalize economic (constraint) forces and economic power in analogy to physical (constraint)...

The article is concerned with understanding the impact of social preferences and wealth inequality on aggregate economic outcomes. We investigate how different manifestations of other-regarding preferences affect incentive contracts at the microeconomic level and how these in turn translate into...

Global games are widely used for equilibrium selection to predict behaviour in complete information games with strategic complementarities. We establish two results on the global game selection. First we show that it is independent of the payoff functions of the global game embedding, though (as...

The existence and persistence of large spatial disparities in un-employment within national economies is a central issue in regional economics. Previous empirical analyses have largely disregarded the role of fundamentals. On the contrary in this paper we explore the link between labour...

Rent-seeking is defined as exercising privileges or expending resources in order to obtain uncompensated gain by redistributing the wealth of others without reciprocating any benefits back to society through wealth creation. This paper pioneers in analyzing the agglomeration of rent-seeking...

Since initially steaming from von Thünen's work (1826), bid-rent approach has been rigorously applied to analyze land use configuration. Alonso (1964), Muth (1969), Beckman (1973), Solow (1973), and Fujita (1989) are among the scientists who greatly contributed to forward von Thünen's theory...

The paper introduces the assumption of costly information acquisition to the theory of mechanism design for matching allocation problems. It is shown that the assumption of endogenous information acquisition greatly changes some of the cherished results in that theory: in particular, the...

We study the problem of assigning indivisible goods to individuals where each is to receive one object. To guarantee fairness in the absence of monetary compensation, we consider random assignments and analyse various equity criteria for such lotteries. In particular, we find that sd-no-envy (as...

This paper analyzes within a two-region endogenous growth model how different types of public policies affect the equilibrium spatial distribution of economic activity. Integration is modeled as a continuum and enables firms to access the public input of the respective other region. Given a...

Based on the psychological interpretation of conditional non-additive probability measures arising in Choquet expected utility theory we introduce a behavioral model of asset price fluctuations. In this model naive agents are prone to a confirmatory bias in the interpretation of new information...