We argue that when externalities such as pollution are nonexcludable, agents must be compelled to participate in a "mechanism" to ensure a Pareto-efficient outcome. We survey some of the main findings of the mechanism-design (implementation-theory) literature -- such as the Nash implementation...

The authors introduce a class of alternating-move, infinite-horizon models of duopoly. The timing captures the presence of short-run commitment s. They apply this framework to a natural monopoly in which costs are so large that at most one firm can make a profit. The firms install short-run...

The authors provide game theoretic foundations for the classic kinke d demand curve and Edgeworth cycle. In their alternating-move model, there are multiple Markov perfect equilibria of both the kinked deman d curve and Edgeworth cycle variety. In any Markov perfect equilibria , profit is...