Former theoretical and empirical studies find that precautionary savings are reduced inthe presence of social security systems. The saving motive, however, does not change:individuals respond to increasing income risk by increasing their savings. Although thisstill holds for common tax and...

This paper investigates whether localization economies as brought forward by Marshall(1890) or urbanization economies as mentioned by Jacobs (1970) are more decisive forregional gross value added per capita. Our novel approach is to explicitly allow forinterdependencies between these two...

Many countries pursue an immigration policy that is targeted at attracting high skilled workers. Borjas (1995) has shown that assuming perfect labor markets immigration leads to a welfare gain for the native population, the so-called immigration surplus. Thus, as the labor market for high...

Recent theoretical literature studies how labor market reforms in one country can affect labor market outcomes in other countries, thereby rationalizing widely-held policy beliefs and empirical evidence. But what is the quantitative relevance of such spillover effects? This paper combines two...

Exhaustion of a natural resource stock may be a rational choice for an individual and/or a community, even if a sustainable use for the resource is feasible and the resource users are farsighted and well informed on the ecosystem. We identify conditions under which it is optimal not to sustain...

We consider non-cooperative environments in which two players have the power to commit but cannot sign binding agreements. We show that by committing to a set of actions rather than to a single action, players can implement a wide range of action profiles. We give a complete characterization of...

The purpose of this article is to analyze how the presence of a competitive fringe, composed by price taker firms, can affect the sustainability of collusive equilibria. Our starting point is that there exists a diffused misunderstanding about its strategical role as collusive minus factor. We...

In this article we apply and extend the model elaborated by Acemoglu and Verdier in their seminal paper (2000), to examine how the economy represented in their theoretical framework responds to an exogenous change in the agent's incentive. In particular, we focus on the consequences of a famous...

Internet, mp3 files, peer-to-peer software and digital technologies for copying have radically modified the music sector. In this paper I present a theoretical model, that investigates the consequences of the appearance of a pirate low quality good (typically a mp3 file) in the music market. In...