We study solution concepts for nontransferable utility games according to which the coalition structure and the payoff allocations are simultaneously determined. The steady bargaining set is a refinement of the Zhou bargaining set, which is included in the Mas-Colell bargaining set. We prove the nonemptiness and partial efficiency of the steady bargaining set for at least one coalition structure under

In this paper, we consider whether a firm that produces high-quality products chooses to produce lower-quality products. We find that when there is only one monopoly in the market, the monopoly will only produce a single-quality product. When there are two firms in the market, one produces high-quality products and the other one produces low-quality products. When certain conditions are met, the firm

Under the hypothesis that workers become distracted and spend less time working during the COVID-19 pandemic, we analyze, via a model of endogenous growth, the relationship between distracting activities and home office supply. We find a strong theoretical relation between the intertemporal elasticity of substitution of the time spent on distracting activities and the intertemporal elasticity of substitution

In this study, I analyze games in which the functions mapping a vector of efforts into each player's share of the prize and its value exhibit an arbitrary degree of homogeneity. I present a simple way to compute the equilibrium strategy and sufficient conditions for a unique interior symmetric pure-strategy Nash equilibrium. The setup nests Malueg and Yates (2006), who exploit homogeneity for rent-seeking

We develop a 3 × 4 full-employment small open economy model for examining the consequences of anti-immigration policy against skilled labor adopted in the developed country on both national income and wage inequality in a source developing economy, keeping aside the aspect of immigration of unskilled labor. We find that both social welfare and wage inequality are likely to deteriorate when, ceteris

We study the slot allocation problem where agents have quasi-linear single-peaked preferences over slots and identify the rules satisfying efficiency, strategy-proofness, and individual rationality. Since the quasi-linear single-peaked domain is not connected, the famous characterization of the Vickrey rule in terms of Holmström (1979)'s three properties cannot be applied. However, we are able to establish

This paper investigates the distributive and welfare impacts of increasing minimum wage in an economy with imperfect competition. In the short run without entry/exit of manufacturing firms, an increase in the urban minimum wage reduces the skilled–unskilled wage gap but worsens unemployment and welfare in the economy. In the long run, a higher minimum wage induces firms to exit the urban manufacturing

In this study, we provide a characterization of the class of proportional bargaining solutions introduced by Kalai. Our result differs from earlier axiomatizations in that we use a property that we label individual disagreement point concavity. This property is a weakening of disagreement point concavity used by Chun and Thomson. An application illustrates the potential usefulness of our new property

Previous research has shown that in the context of a prototypical New Keynesian model, more progressive income taxation may lead to higher volatility of hours worked and total output in response to a monetary disturbance. We analytically show that this business‐cycle destabilization result is overturned within an otherwise identical macroeconomy subject to impulses to the household's utility formulation

This paper examines the net benefit accruing to a government when choosing between a lower tax rate on future profits and an investment subsidy as investment stimulation. We hypothesize that either the firm or the government faces Knightian uncertainty in contemplating investment. In the presence of the firm's Knightian uncertainty, the government prefers the investment cost subsidy to tax rate reduction

To enter into a host country market with significant technological distance, a multinational corporation forms a joint venture affiliate with a local partner and collects licensing royalties from the affiliate. Both parties to the joint venture simultaneously decide their respective equity shares and the capital capacity of a continuous investment project via Nash bargaining. Since the multinational

We follow the Nash program to provide strategic justifications of the TAL family of rules for bankruptcy problems. The design of our game is inspired by an axiomatization of the TAL family of rules exploiting the properties of consistency together with certain degrees of lower and upper bounds to all creditors. Bilateral negotiations of our game follow the spirit of those bounds. By means of consistency

We analyze the problem of allocating indivisible objects and monetary compensations to a set of agents. In particular, we consider envy‐free and budget‐balanced rules that are least manipulable with respect to agents counting or with respect to utility gains. A key observation is that, for any profile of quasi‐linear preferences, the outcome of any such least manipulable envy‐free rule can be obtained

I use the middle products model of Sanyal and Jones to study the pass‐through of a tariff on the price of non‐traded final goods. I extend their analysis by comparing the short‐run effect of the tariff, when all factors are immobile, with the effects when labor is mobile between all sectors. It is shown that the short‐run pass‐through may vary from zero to a magnified effect on the price of the final

We first consider a closed model, where households' time discount depends on externality in consumption. We can prove that there is a unique steady state, which is a saddle point. Then we extend the model to a two‐country world, and derive the condition on the effects of consumption externality under which there is a unique free trade steady state with saddle‐point stability.

Jones's (2000) celebrated book has inspired a generation of work devoted to understanding the causes and consequences of outsourcing. While much of this work has focused on the outsourcing versus domestic production decision of the firm, with labor cost‐saving as the key driver for outsourcing, we further explore how preference‐based outsourcing may arise in a dynamic world equilibrium. We address

In kidney transplantation, immunosuppressants are being used to relax all immunological constraints, allowing patients to receive transplants from biologically incompatible donors. We propose an efficient way of using immunosuppressants in combination with a kidney exchange program. We introduce the top‐trading cycles and chains solution, a modification of the top‐trading cycles rule for the standard

The present model revisits the issue of unit and ad valorem taxes in a model of monopolistic competition. It is shown that if the assumption of full employment is relaxed, then taxation can increase employment conditionally when the elasticity of substitution among varieties is low. Moreover, with the same level of initial unemployment, ad valorem tax is better than unit tax in terms of employment

Under an often employed imitation mechanism, we investigate whether countries with different emission abatement benefits and costs can achieve an international environmental agreement. When the abatement efficiencies, ancillary benefits of abatement, and/or the numbers of countries are large, an international environmental agreement with full participation is the unique long‐run equilibrium. For the

In this study, we explore a method of ranking nomination rules as a collective decision‐making procedure. Nomination rules determine which alternatives are eligible for collective decision‐making by aggregating the opinions of nominators, which are expressed positively or negatively. It is possible to compare nomination rules based on their “nominating power” distributions because they can be seen

This paper attempts to challenge two puzzles in the welfare program. The first puzzle is “non‐take‐up welfare,” which occurs when needy people do not take up welfare. Second, in some countries, the benefit level is high, but the recipient ratio is low; while the other nations have lower benefit levels but higher recipient ratios. We present a model of welfare stigma in which both non‐take‐up and welfare

This paper examines the income distribution and welfare effects of appropriation activities in an economy. In the short run, with a given number of firms, appropriation can narrow wage inequality between skilled and unskilled labor when the capital resources accrued by appropriators are not large. However, wage inequality widens when the capital accrued is large. In the long run, with free entry and

We show that whether a technology leader invests more in R&D compared to a technology follower may depend on the R&D process and whether the follower is in the market. Considering Cournot competition, we show that if the firms are in the market, the technology leader (follower) invests more in R&D under a step‐by‐step R&D process (when the firms target similar technologies). However, if the technology

This paper investigates how the presence of social capital affects the externality arising from status‐seeking preference as a parable for inefficient antagonistic behavior. It is assumed that the stock of social capital accumulates through the strategic interaction among a finite number of rational, infinitely‐lived individuals. Using a differential game, we show that there are two types of Markov

In many emerging economies incumbent firms often use dubious means to deter entry of other firms. We analyze this scenario in a three‐stage game of entry deterrence. The incumbent has incomplete information about the entrant's costs but can increase this cost by resorting to unfair means (e.g. bribing a politician who harms the entrant). We completely characterize the optimal bribe and show that this

The path‐breaking work of Card and Krueger, showing that a higher minimum wage can increase employment, turned the age‐old conventional wisdom on its head. This paper demonstrates that this apparently paradoxical result is perfectly plausible in a competitive general equilibrium production structure of a small open economy with a non‐traded good, without recourse to monopsony, spatial heterogeneity

Recent advances in the theoretical literature on international trade have shown considerable interest in the demand side of the general equilibrium. This paper supplements the literature by highlighting the role of non‐marketed complementaries. Individuals derive utility by consuming two marketed commodities and a non‐marketed commodity. The non‐marketed commodity affects the relative demands of the

Ronald Jones made seminal contributions to general‐equilibrium theory, moving away from an emphasis on the existence of equilibrium to algebraic formulations which enabled us to characterize key relationships between parameters and variables, such as that between tariffs and domestic factor prices and welfare. But the analysis remained limited in value for policy evaluation: the analysis was local

We propose a refinement process of dynamic equilibria based on small random perturbations (SRPs) of the backward perfect foresight (bpf) equilibrium map in a class of one‐step, forward‐looking dynamic models. An equilibrium is selected if its stationary measure is the limit of the stationary measures associated with the processes generated by the SRPs of the bpf maps, as the perturbation size approaches

This paper illuminates one mechanism by which democracy may fail to mitigate income inequality despite a widespread preference against it. When income inequality aversion is prevalent, high‐skilled, higher‐wage workers may adjust their working time to reduce inequality. However, the decrease in societal efficiency due to forgone high‐skilled labor outweighs an increase in efficiency from lower‐skilled

It is our pleasure to dedicate this collection of papers to Marcus Berliant, in recognition of his achievements in the economics profession, and for his influence on his students, coauthors, and researchers in general equilibrium and spatial economics. Marcus already stood out as a brilliant and original figure when he obtained his PhD from Berkeley University in 1982, where he worked on “A General