If agents negotiate openly and form coalitions, can they reach efficient agreements? We address this issue within a class of coalition formation games with externalities where agents' preferences depend solely on the coalition structures they are associated with. We derive Ray and Vohra's (1997)...

This paper analyses the influence of norms of fairness on wage formation. Fairness is defined by `real-wage' and `relative-wage' norms that relate wage offers to workers' own current wage and to the wages of other groups of workers, and, to avoid shirking, firms pay fair wages. The wage norms...

Labor turnover creates longer term career concerns incentives that motivate employees in addition to the short term monetary incentives provided by the current employer. We analyze how these incentives interact and derive implications for the design of incentive contracts and organizational...

This paper generates high frequency data for the underground labor and the underground production using a theoretical general equilibrium model, over the sample 1970:01-1992:04 (32 years; 128 observations). We compare selected time series properties of the generated series with those of the...

We consider semiparametric frequency domain analysis of cointegration between long memory processes, i.e. fractional cointegration. This concept allows derivation of useful long-run relations even among stationary long memory processes. The approach uses a degenerating part of the periodogram...

This paper considers the impact of popularity on duopolists’ entry strategies into an emerging industry, where each consumer holds a preference for one of two competing brands. Brand popularity is influenced by word of mouth communication, as early adopters recommend the brand they have bought...

Economic literature often offers conflicting views on the likely efficiency effects of information exchanges, communication between firms, and market transparency. On the one hand, it is argued that increased information dissemination improves firm planning to the benefit of society (including...

Recent literature shows that embedding fractionally integrated time series models with spectral poles at the long-run and/or seasonal frequencies in autoregressive frameworks leads to estimators and test statistics with non-standard limiting distributions that must be simulated on a case-by-case...

The Grand Transition (GT) view claims that economic development is causal to institutional development, and that many institutional changes can be understood as tran¬sitions occurring at roughly the same level (zones) of development. The Primacy of Insti¬tu¬tions (PoI) view claims that...

The paper analyzes 3 main trends: (t1) The economic development in the Muslim world is slower than in the rest of the world. (t2) The world grows increasingly democratic due to rising incomes, but this trend does not affect the Muslim world. (t3) The world grows increasingly secular due to...