Does a country strictly gain if it acts as a leader in a resource market under bilateral monopoly? Using differential games, we show that the answer is "yes" when leadership can be exercised globally (global Stackelberg leadership), but possibly "no" when it is exercised only at each stage...

We offer a definition of iterated elimination of strictly dominated strategies (IESDS) for games with (in)finite players, (non)compact strategy sets, and (dis)continuous payoff functions. IESDS is always a well-defined order independent procedure that can be used to solve Nash equilibrium in...

Long run economic growth goes along with structural change. Recent work has identified explanatory factors on the demand side (non-homothetic preferences) and on the supply-side, in particular differential productivity growth across sectors and differences in factor proportions and capital...

We built an overlapping generation model of endogenous growth driven by human capital formation. Young people differ in their innate abilities, but these differences are not known even by the individuals themselves when they are going through the process of education, so that there are no...

Productivity dispersion across countries has led to several studies on the determinants of firm level productivity and the role of macroeconomic policies in determining productivity. In this paper, we investigate the effect of fiscal consolidation on firm level productivity in 12 advanced...

We present a model of market hyper-segmentation, where a monopolist acquires within a short time all information about the preferences of consumers who purchase its vertically differentiated products within a given period. The firrm offers a new price/quality schedule after each commitment...

We consider a differential game between two players, where one player has the first-mover advantage. We compare the equilibrium of this model with the one generated by a conventional symmetric model. The existence of a first mover results in more conservationist exploitation in the aggregate. We...

This paper models oligopolistic competition among potential multinational firms in an environment of firm heterogeneity, incomplete information on costs, and strategic interactions. We show that foreign direct investment is more likely if it can serve as a signal of productivity in an...

We model an oligopoly where firms are allowed to freely enter and exit the market and choose the quality level of their products by incurring different setup costs. Using this framework, we study the mix of firms in the long‐run Cournot–Nash equilibrium under different cost structures and...

We investigate economic depreciation of natural capital for cases of non-stationary output prices, technology, and interest rates. For the former two cases (exogenous movements in prices and technology), constant consumption emerges under a strategy of investing to cover off economic...