We consider an economy where a finite set of agents can trade on one of two asset markets. Due to endogenous participation the markets may differ in the liquidity they provide. Moreover, traders have idiosyncratic preferences for the markets, e.g. due to differential time preferences for...

A one-dimensional model of spatial political competition with endogenous party formation is developed. It is proved that at equilibrium there are only two parties. These parties propose alternatives in the extreme position s of the policy space. The adopted policy, however, is a compromise...

In this note we show that no solution to coalition formation games can satisfy a set of axioms that we propose as reasonable. Our result points out that "solutions" to the coalition formation cannot be interpreted as predictions of what would be ìresting pointsî for a game in the way stable...