Following insights by Bewley (1999a), this paper analyses a model with downward rigidities in which firms cannot pay discriminate based on a year of entry to a firm, and develops an equilibrium model of wages and unemployment. We solve for the dynamics of wages and unemployment under conditions...

In models recently published by several influential macroeconomic theorists, rigidity in the real wages that firms pay newly hired workers plays a crucial role in generating realistically large cyclical fluctuations in unemployment. There is remarkably little evidence, however, on whether...

A simple oligopolistic common-pool exhaustible resource game is considered. By analysing punishment strategies, including optimal punishments, it is possible to determine which cartel agreements are implementable in a non-cooperative play of the game. Joint-profit maximizing allocations are...