The paper studies credible information transmission by governments. A group of heterogenous individuals have to make private investment and labour supply decisions while relying on the government for information about investment returns. The government consists of an elected citizen who chooses...

The "short-run approach" calculates long-run producer optima and general equilibria bybuilding on short-run solutions to the producer's profit maximization problem and onprofit-based valuation of the fixed inputs. We outline this method and illustrate it on anexample of peak-load pricing.

Classical theories of exchange rates, such as Mint Par and Purchasing Power Parity (PPP), have the desirable property that they define a network of exchange rates in which no profit by 'compound arbitration' or 'cyclic arbitrage' is possible. Conversely, it will be shown that any network of...

It has been argued that collusion among the members of an organization or a vertical structure creates efficiency losses, and hence should be prevented. This paper shows that whenever collusion takes the form of co-insurance agreements, here called ?friendships?, among the members of a vertical...

This paper introduces two complementary models of firm-specific training: an informational model and a productivity-enhancement model. In both models, market provision of firm-specific training is inefficient. However, the nature of the inefficiency depends on the balance between the two key...

A new and powerful dictatorship result is presented. It is well known that in social choice problems, the negativism of the original Arrow result can be overcome by admitting information based on interpersonal comparisons. But what if individuals in society have different opinions about htese...