Tiebout's basic claim was that when public goods are local there is an equilibrium and every equilibrium is efficient. The literature seems fall short of verifying this conjecture: If the notion of equilibrium is too weak then equilibrium is nonempty yet some equilibria could be inefficient. On...

This paper shows nonemptiness of the core of a customs union game with a status quo equilibrium with tariffs by employing an appropriate notion of the core as in Kowalczyk and Sjöström (1994, Economica). Specifically, we find that if customs unions may have no effects on non-member countries...

Planned shopping malls usually have one or more department stores (anchor stores) and multiple specialized retail stores in each commodity category. This paper presents a model of shopping malls in which these two types of stores sell noncomplementary commodities. If anchor stores sell standard...

We analyze the core of a class of coalition formation game in which every player's payoff depends only on the members of her coalition. We first consider anonymous games and additively separable games. Neither of these strong properties guarantee the existence of a core allocation, even if...

This note shows that if commodities are tradable across jurisdictions, then it may be efficient to have heterogeneously sized jurisdictions, even if (i) consumers are identical, (ii) there is one private good and one public good, (iii) utility and production functions are not affected by...

Joint production between rival firms often entails knowledge transfers without direct compensation, leaving the question as to why more efficient firms would give their rivals such an advantage.  We find that such transfers are credible mechanisms to make the market more competitive so as to...

Many cities are located on rivers or coasts. This paper argues that such cities developed as transportation hubs or markets for interregional trade, since these locations provide better access (lower marginal transportation costs) to other regions. Local products are collected at such hubs, and...

In this paper, we analyze capacity manipulation games in hospital-intern markets inspired by the real-life entry-level labor markets for young physicians seeking residencies at hospitals. In these markets, where the matching is determined by a centralized clearinghouse called the National...

This paper compares the equilibrium outcomes in search markets with and without referrals. Although it seems clear that consumers would benefit from referrals, it is not at all clear whether firms would unilaterally provide information about competing offers since such information could...

This paper establishes an existence theorem of a non-trivial (positive capital stock) steady-state equilibrium in Diamond's (1965) overlapping-generations model with production by employing the steady-state consumption curve introduced in Ihori (1978). The assumptions on preferences and...