I investigate when side payments facilitate cooperation in a context with strategic delegation. On the one hand, allowing side payments may be necessary when one party's participation constraint otherwise would be violated. On the other, with side payments each principal appoints a delegate that...

This paper analyses the incentives to participate in and the stability of international climate coalitions. Using the integrated assessment model WITCH, the analysis of coalitions' profitability and stability is performed under alternative assumptions concerning the pure rate of time preference,...

This paper analyzes equlibrium and welfare for a tractable class of economies (games) with externalities, strategic complementarity or substitutability, and heterogenous information. First, we characterize the equilibrium use of information; complementarity heightens the sensitivity of...

Hybrid governance structures between markets and hierarchies in many industries, e.g., in energy and telecommunications, challenge antitrust and regulation policy. The paper focuses on the theoretical and methodological basis provided by the New Institutional Economics (NIE) for analyzing the...

Der Landtag in Nordrhein-Westfalen hat jüngst beschlossen, bei der kommunalen Wirtschaftstätigkeit den privaten vor staatlichen Unternehmen Vorrang zu geben. Dies geht in die gleiche Richtung wie die Vorgaben der EU-Kommission zur Beihilfenkontrolle. Wie lässt sich staatliche...

In Deutschland wird anders als in den übrigen Industriestaaten heftig über das Für und Wider von Mindestlöhnen diskutiert. Wie wird die Diskussion theoretisch untermauert? Wie wirken sich Mindestlöhne auf Beschäftigung und Lohnniveau aus? Kann Armut durch die Festlegung von Mindestlöhnen...

The paper examines how the long-run inflation-unemployment tradeoff depends on the degree to which wage-price decisions are backward- versus forward-looking. When economic agents, facing time-contingent, staggered nominal contracts, have a positive rate of time preference, the current wage and...

In this paper, we argue that the observed difference in the cost of intraday and overnight liquidity is part of an optimal payments system design. In our environment, the interest charged on overnight liquidity affects output, while the cost of intraday liquidity only affects the distribution of...

We develop a parsimonious model of the interbank payment system to study congestion and the role of liquidity markets in alleviating congestion. The model incorporates an endogenous instruction arrival process, scale-free topology of payments between banks, fixed total liquidity that limits...