We examine alliances between asymmetric countries. We find that the results depend on the nature of the equilibrium. If the equilibrium is an interior one then, with an increase in asymmetry, the level of the alliance-wide defense good decreases and the divergence between the first best and the...

This paper examines whether integration of national markets fosters innovation in the technologically inferior country. In a simple set up where a technologically backward home firm and a technologically advanced foreign firm compete in qualities and prices in an integrated market, we find that...

Consider a Bertrand-Edgeworth duopoly with linear cost functions. If the firms produce to stock then no Nash equilibrium in pure strategies exists. If, however, the firms produce to order then all subgame perfect Nash equilibria involve the firms charging a price equal to marginal cost.

This paper studies a non-cooperative bargaining problem with one buyer and many sellers, focussing on the tension between the complementarity intrinsic to such a setup and efficiency. We address this problem in a very general setup with a technology that allows for variable degrees of...

We identify a new route through which patent protection may affect R&D incentives, the tournament effect. It may decrease R\&D incentives, in which case patent protection may either adversely affect the level of R&D, or may discourage licensing. In either case welfare may fall.

We examine if the folk theorem of perfect competition holds under Bertrand competition (when firms supply all demand), both when entry is exogenous, as well as when it is free. Inter alia, we also characterize the limit equilibrium sets.

This paper explores the relationship between financial intermediation and employment. We explain why some economies have low financial intermediation even when financial intermediation is safe. Moreover, we seek to explain why these economies tend to be poor and vulnerable, and also have large...

In this paper we build a theory of joint venture formation and instability based on synergy and monitoring. We find that monitoring problems may prevent the joint venture from forming at all. Moreover, joint venture formation usually involves over-monitoring, and ex post could involve cheating...

We develop a game-theoretic analysis of terrorism that examines the interaction between a terrorist organization and multiple target countries, and considers both pre-emption and deterrence as counterterrorist policies. The damage from terror includes not only the material cost of fatality,...

This paper examines public-private partnerships in micro-finance, whereby NGOs can help in channelizing credit to the poor, both in borrower selection, as well as in project implementation. We argue that a distortion may arise out of the fact that the private partner, i.e. the NGO, is a...