This paper provides a game-theoretic model of representative democracy with endogenous party formation. Coalition formation may occur before and after elections, and the expected payoffs from the after-election majority game affect incentives to form parties before the elections. In this way...

We use an extensive form, universal type space to provide the following epistemic characterisation of extensive form rationalisability. Say that player i strongly believes event E if i is certain of E conditional on each of her information sets consistent with E. Our main contribution is to show...

Within this paper an oligopolistic German electricity market is modelled by a game theoretic modelling tool representing a Nash equilibrium. Due to European electricity market liberalisation electricity producing and trading firms react strategically like global market players by joining and...

We describe a model of international, multidimensional policy coordination where countries can enter into selective and separate agreements with different partners along different policy dimensions. The model is used to examine the implications of negotiation tie-in - the requirement that...

This paper proposes a formulation of coalitional payoff possibilities in games with externalities, based on the assumption that forming coalitions can exploit a "first mover advantage". We derive a characteristic function and show that when outside players play their best response...

This paper applies the theory of social situations to international environmental agreements on greenhouse gas emission reduction. The usual pessimism on the size of stable coalitions among world regions is challenged for two alternative cases, namely by introducing farsightedness and by...

A well established belief both in the game-theoretic IO and in policy debates is that market concentration facilitates collusion. We show that this piece of conventional wisdom relies upon the assumption of profit-seeking behaviour, for it may be reversed when firms pursue other plausible goals....

When do flexible exchange rates prevent monetary and financial conditions from spilling over across currencies? We examine a model in which international investors strategically supply capital to a small inflation-targeting economy with flexible exchange rates. For some combination of...

Modern economies rely heavily on their infrastructure networks. These networks face threats ranging from natural disasters to human attacks. As networks are pervasive, the investments needed to protect them are very large; this motivates the study of targeted defense. What are the 'key' nodes to...

This paper offers a resolution to an extensively studied question in theoretical economics: which measure spaces are suitable for modeling many economic agents? We propose the condition of 'nowhere equivalence' to characterize those measure spaces that can be effectively used to model the space...