We examine how trade sanctions can be imposed effectively in a trading network. We focus on three factors that affect trade sanctions: a country’s endowment, distance between trading countries, and connectivity in the network. Our models explain several empirical observations: (i) sanctions...

Economic agents are typically connected in multiple interrelated networks (multiplex). We examine how an initial “seed” network prompts link formation on the multiplex and shapes its equilibrium topology. In a duplex, positive (negative) externalities emanating from strategic complementarity...

Please enter abstract text here.We investigate the optimal size of a nation in the context of a portfolio choice model under uncertainty. With an equal sharing rule, we characterize the equilibrium coalition structure, which is shown to depend on income, risks, and market correlations....