We analyze a voting model in which a democratic monopoly labor union rationally shrinks towards zero over time. In our model, preferences are not single-peaked so that this shrinkage may occur in spite of objections by the median voter. We characterize the wage-employment path as a function of...

Throughout Joseph Stiglitz's long and distinguished career in economics, the focus has been on the real world, with all of its imperfections. His 2001 Nobel Prize recognized his pioneering research in imperfect information; his work in other areas, including macroeconomics, public economics, and...

This paper reexamines Grossman and Hart's (1980) insight into how the free-rider problem excludes an external raider from capturing the increase in value it brings to a firm. The inability of the raider to capture any of the surplus depends critically on the assumption of equal and indivisible...

In March 2004, following a five-year investigation, the European Commission found Microsoft liable for illegally tying the Windows Media Player to the Windows operating system. This Column evaluates the antitrust issues and the proposed remedy. What is remarkable is that the remedy eliminates...

Pretrial negotiation is a structured environment in which to study bargaining with incomplete information. When a plaintiff believes that a defendant owes him damages, he may first attempt to reach a private settlement before resorting to a costly court-imposed judgment. A central issue in their...

In declining industries, capacity must be reduced in order to restore profitability. Who bears this burden? Where production is all or nothing, there is a unique subgame-perfect equilibrium: the largest firms exit first (P. Ghemawat and B. Nalebuff [1985]). In this paper, firms continuously...

This paper develops a theoretical framework to evaluate the benefits and costs of energy projects in oil-importing developing countries. This is used to address various questions: How should the problems of energy dependency and vulnerability be reflected in a project appraisal? Are there...