This paper considers competition faced by an efficient public incumbent in a second degree price discrimination setting, where competitors' costs are private information. Our aim is to explore the implications brought by the introduction of a competitor allowed to price discriminate as a move...

We investigate the issue of model uncertainty in cross-country growth regressions using Bayesian model averaging (BMA). We find that the posterior probability is very spread among many models suggesting the superiority of BMA over choosing any single model. Out-of-sample predictive results...

Hold-up arises when part of the return on an agent’s relationship-specific investments is ex post expropriable by his trading partner. The hold-up problem has played an important role as a foundation of modern contract and organization theory, as the associated inefficiencies have justified...

A new modelling strategy is introduced which provides a practical approach to incorporating long- run structural relationships, suggested by economic theory, in an otherwise unrestricted VAR model. The strategy is applied in the construction of a small quarterly macroeconometric model of the UK,...

This paper proposes and analyses an hybrid of Owen.s (1988, 1990, 1991) Empirical Likelihood (EL) and bootstrap, EL-bootstrap, as an alternative to the General Method of Moments (GMM) within dynamic panel data models. We concentrate on the .nite-sample size properties of their...

Proponents of proportional electoral rules often argue that majority rule depresses turnout and may lower welfare due to the 'tyranny of the majority' problem. The present paper studies the impact of electoral rules on turnout and social welfare. We analyze a model of instrumental voting where...

We develop a neoclassical trade model with heterogeneous factors of production. We consider a world with two factors, labor and managers, each with a distribution of ability levels. Production combines a manager of some type with a group of workers. The output of a unit depends on the types of...

This paper is an investigation into the dynamics of asset markets with adverse selection à la Akerlof (1970). The particular question asked is: can market failure at some later date precipitate market failure at an earlier date? The answer is yes: there can be “contagious illiquidity” from...

In this paper we show that the inclusion of unemployment-tenure interaction variates in Mincer wage equations is subject to serious pitfalls. These variates were designed to test whether or not the sensitivity to the business cycle of a worker’s wage varies according to her tenure. We show...