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Seek to compare the consequences of single‐source versus multiple‐source lending for a borrower who has loans that can be prematurely terminated.

The considered model framework is an option‐theoretic firm value model similar to Merton (1974) but where lenders have the additional right to prematurely terminate the loans. The single lender is a monopolist, while multiple lenders are represented by a continuum without individual impact on the aggregate termination decision.

The model explains that, if the borrower is in financial distress but has positive net present value projects, a single lender has a higher incentive to save the firm and therefore terminates fewer loans than multiple lenders. In the opposite case where the firm is not under financial distress, it is the other way round and multiple lenders terminate fewer loans than a single lender. As a result, equity holders are better off by having a loan from a single‐source under financial distress but multiple‐source lending is advantageous in the absence of financial distress.

To focus on the origin for arising differences from single‐source and multiple‐source lending, consideration is given to the simple case with perfect information and without monitoring and renegotiation. These market imperfections can be incorporated into the model in a straightforward way.

While other models in the literature require market imperfections to explain the relevance of the bank relationship, this paper indicates that even in the absence of market imperfections the lending relationship is fundamental as long as lenders have the right for early terminations.

We develop an interactive framework to model speculation (over regulation) and regulation (of speculation) in a greenhouse gas (GHG) permits market. In our proposed model, big traders engage in speculation by strategically withholding and releasing permits to influence the temporal path of permit prices in order to maximize their profits. The national government/regulator has an incentive to stabilize permit prices by suitably manipulating stocks of permits. Thus, the GHG permits market can typically be characterized by circular interdependence in which big traders will be “gaming” the regulator to generate profits: the state of the market affects speculative behavior of traders that in turn impacts on government's behavior, which in turn impacts on the state of the market. The interactive framework explores the gaming between speculators and a regulator, or government, to shed crucial insights on the nature of equilibrium in possible global emissions trading schemes (GETS). By so doing, we are able to unravel potential pitfalls of any global trading system in pollution permits for arresting global warming. Once policy makers are aware of these pitfalls, for example, a “culture of speculation” as opposed to a culture of safety, they can devise a suitable mechanism to bypass these potential pitfalls.

We investigate the positive and normative consequences of child-labor restrictions for economic aggregates and welfare. We argue that even though the laissez-faire outcome may be inefficient, there are usually better policies to cure these inefficiencies than the imposition of a child-labor ban. Given this finding, we investigate the potential political-economic reasons behind the emergence and persistence of child-labor legislation. Our investigation is based on a structural dynamic general equilibrium model that provides a coherent and uniform framework for our analysis.

The study aims to investigate the effect of cultural alignment and value congruency between children and founder on intergenerational succession and on the observation of family optimal outcomes.

A game-theoretical approach is used to develop a sequential game modeling the strategic interactions behind successor selection. The authors test its main predictions by conducting an experiment with 75 subjects.

A theoretical prediction that misalignment between children and founder leads to outcomes without intergenerational succession, or to outcomes with intergenerational succession that are not family optimal. These predictions are buttressed by our experiment, which also found evidence that the family optimal outcome is focal when there are multiple equilibria.

No light is thrown on the sources of cultural (mis)alignment, but only on some of its consequences. Further studies of a different nature are needed to better understand the former.

Cultural diffusion and value congruency within the family should be timely fostered to promote harmony during the succession process and raise the chances of successful succession.

The cultural alignment and value congruency between incumbent and successors is treated as shaping the incentives that both types of agents face in the successor-selection process. Further, experimental techniques have not been used to test the results obtained in games exploring issues in family firm succession. This paper aims to begin filling this gap.

This paper studies banking crises in a framework where the government can be biased in favor of a “business elite.” When the deposit contract is such that the run on the bank takes place only if the economic system is in a recession, the presence of a “crony” government introduces an element of indeterminacy, i.e. equilibrium can be multiple. Moreover, by means of an information updating mechanism, it is shown that the crisis may spread out to countries “similar” to the one that is examined, i.e. that contagion is possible.

In many societies, conflicts of violent nature regularly spring up that usually cause a destruction of economic and social assets and needless loss of human lives. Violent conflicts and food entitlements seem to bear mutual feedbacks: first and foremost, as violent conflicts result in destruction of economic assets, conflicts usually tell upon the cultivation of foods, procurement and storage of foods and also the distribution and marketing of foods. The disruption in the agrarian sector can lead to serious decline in food availability and consequent famines, which can exacerbate and fuel further conflicts. On the other hand, the distribution and availability of foods can trigger violent conflicts in backward societies as a means to acquire and retain food entitlements, which can in turn jeopardise the agrarian equilibrium. Thus, the relationship between food entitlements and conflicts are a double-edged sword that can lend precarious instability to a backward society. During the last five decades, governments in developing nations have kept a close vigil on their agrarian sector, yet there is a clear indication in the global economy that warns of a looming food crisis, especially in the poorer regions of our globe. Food crises can seriously challenge global peace. Conflicts and hunger are hence complex phenomena. This chapter provides a comprehensive, and possibly the first, study of the economics of food entitlements and potential threats of conflicts in the current conjuncture.

Over the last years, powerful advances in the area of dynamic games have enriched game theory and made it more applicable to the modeling of real-world competitive strategies. The study of strategic behaviors of firms in an oligopoly market has received little attention, even though real firms have been shown to compete in output and in price in a single industry. The purpose of this study is to propose a game-theoretic approach to studying strategic behaviors of firms in an oligopoly market structure.

This approach was developed to study market dynamics and pricing strategic behavior of firms that have the possibility of deciding to be one of the two types (price-maker or price-taker) and reconsider the choice overtime on the basis of their current insights and knowledge and their experience. Firms try to improve their performance in the competitive market in a strategic way, by considering their steady-state profits and choosing the best type given the other firms’ types, actions and interactions.

The results of the present study confirm the previous study that the Cournot market is a stable market, where each firm can be a price-maker and enjoy individual learning as well as social learning. On the contrary, the market with price-takers only is never stable, and, therefore, the Walrasian equilibrium may not be supported in some instances. The Cournot market loses its stability as the number of firms in the market increases due to the fact that it will be more profitable for a firm to switch to price-taking when the number of firms is high enough. In such a situation, when the number of price-takers increases, there are no stable markets and price dynamics are destabilized.

The study and modeling of real-world competitive strategies would enhance the understanding of oligopoly markets. The study of strategic behaviors of firms in an oligopoly market has received little attention, even though real firms have been shown to compete in output and in price in a single industry as price-takers and price-makers.