The authors take a simple, well-known macroeconomic model and treat it as a gam e between two players-the government and an all-embracing union. The payoffs have the form of a prisoner's dilemma. The equilibrium outcom e produces unwanted inflation and is not Pareto optimal. This is desp ite the...

In Medellin, Colombia, electricity prices follow an unusual system of rising block prices. The stated objective of the policy is to redistribute income. In this paper we calculate the degree of redistribution achieved relative to that of a horizontal price schedule. We also calculate the...