This paper demonstrates that the Bertrand paradox does not hold if cost functions are strictly convex. Instead, multiple equilibria exist which can be Pareto-ranked. The paper shows that the Pareto-dominant equilibrium may imply profus higher than in Cournot competition or may even sustain...

The impact on internal migration of the recent Customs Union (CU) agreement between Turkey and the European Union (EU) has been studied with an intra-industry trade Applied General Equilibrium (AGE) model with intersectoral capital mobility, under two alternative specifications for the labour...

An explanation is given why communist economies usually react smoothly but sometimes very dramatically to seemingly minor changes in the political and economic environment. In this paper such dramatic reactions materialize in a sudden clamp-down on individual freedom and sudden economic...

In situations where the traditional instruments of trade policy are not available, protection for import-competing industries can be given only indirectly. One of the candidates of giving indirect subsidies is environmental regulation. The competitiveness of a domestic industry can be improved...

This paper discusses the possible nature of a transformation crisis. The major point is that the institutional void which the collapse of socialism has left behind is a major cause of the slump. The wealth of developed economies, be they socialist or capitalist, springs from a complicated...

In this paper redistribution policy is analyzed in a 2-period overlapping generations model with heterogeneous individuals and asymmetric information between the government and the private sector. Individuals of the same generation differ with respect to their labor productivity. In each period,...

This paper analyzes wage competition between national trade unions caused by the international mobility of capital. Perfect capital mobility leads to a Bertrand result for the outcome of wage competition: A pure strategy equilibrium implies full employment in all countries. It is shown that such...