sequential formation of coalitions in games with externalities and fixed payoff division this paper analyzes a sequential game of coalition formation when the division of the coalitional surplus is fixed and the payoffs are defined relative to the whole coalition structure gains from cooperation are represented by a valuation which maps coalition structures into payoff vectors i show that any core stable coalition structure can be attained as a stationary perfect equilibrium of the game if stationary perfect equilibria may fail to exist in general games a simple condition is provided under which they exist in symmetric games furthermore symmetric stationary perfect equilibria of symmetric games generate a coalition structure which is generically unique up to a permutation of the players a general method for the characterization of equilibria in symmetric games is proposed and applied to the formation of cartels in oligopolies and coalitions in symmetric majority games journal of economic literatureclassification numbers c78 c71 1996 academic press inc

efficient mechanisms for bilateral trading we consider bargaining problems between one buyer and one seller for a single object the seller s valuation and the buyer s valuation for the object are assumed to be independent random variables and each individual s valuation is unknown to the other we characterize the set of allocation mechanisms that are bayesian incentive compatible and individually rational and show the general impossibility of ex post efficient mechanisms without outside subsidies for a wide class of problems we show how to compute mechanisms that maximize expected total gains from trade and mechanisms that can maximize a broker s expected profit journal of economic literature classification number 026

the excise tax effects of the property tax abstract this paper constructs a theory of how differences across regions in property tax rates affect product prices and factor prices for a model where labor and capital are perfectly mobile between regions it is shown that consumers residing in different regions face the same nontraded good prices even when property tax rates differ across regions

which way does water flow an econometric analysis of the global price integration of water stocks around us 600 billion of investment is desperately needed to address forecasted huge shortages in water supply globally a number of worldwide investors so called water funds have started to take up this challenge for these global water investors knowledge about the extent of integration between the water sectors of financial markets is highly important according to international portfolio diversification theory the less more integrated markets are the more less benefits there are from international diversification in this study we investigate the extent and manner of interdependence among the us european and asian water sector of the equity markets based on vector autoregression var granger causality and impulse response analyses we find that world water stock market prices are indeed significantly interdependent although this interdependence varies across time periods each market quickly responds to shocks from each other and completes its response within 3 days hence for water in

an investigation into the interdependence of global water indices a var analysis we investigate the extent and manner of equity price interdependence among four water indices world water index s network global water index s net s p global water index s p and msci acwi water utilities index msci acwi using the vector autoregression var framework for the period 2004 2014 we also employ methods of granger causalities variance decomposition and impulse responses we find granger causality significance between s net and msci acwi and s net and s p indices at the 1 level of significance suggesting that the indices are significantly linked further s net is the most influential index amongst them in the forecast variance that can be accounted by s net at level of 55 75 our study indicates that the four water indices are interdependent and related so the water indices are influenced by movements in the other water indices

a theory of disagreement in repeated games with bargaining this paper proposes a new approach to equilibrium selection in repeated games with transfers supposing that in each period the players bargain over how to play although the bargaining phase is cheap talk following a generalized alternating offer protocol sharp predictions arise from three axioms two axioms allow the players to meaningfully discuss whether to deviate from their plan the third embodies a theory of disagreement that play under disagreement should not vary with the manner in which bargaining broke down equilibria that satisfy these axioms exist for all discount factors and are simple to construct all equilibria generate the same welfare optimal play under agreement generally requires suboptimal play under disagreement whether patient players attain efficiency depends on both the stage game and the bargaining protocol the theory extends naturally to games with imperfect public monitoring and heterogeneous discount factors and yields new insights into classic relational contracting questions

sequential bargaining in a market with one seller and two different buyers abstract a matching and bargaining model in a market with one seller and two buyers differing only in their reservation price is analyzed no subgame perfect equilibrium exists for stationary strategies we demonstrate the existence of inefficient equilibria in which the low buyer receives the good with large probability even as friction becomes negligible we investigate the relationship between the use of nash and sequential bargaining nash bargaining seems applicable only when the sequential approach yields a unique stationary strategy subgame perfect equilibrium

comovement in international equity markets a sectoral view abstract we investigate shifts in correlation patterns among international equity returns at the market level as well as the industry level we develop a novel bivariate garch model for equity returns with a smoothly time varying correlation and then derive a lagrange multiplier statistic to test the constant correlation hypothesis directly applying the test to weekly data from germany japan the uk and the us in the period 1980 2000 we find that correlations among the german uk and us stock markets have doubled whereas japanese correlations have remained the same both dates of change and speeds of adjustment vary widely across countries and sectors

existence of stationary bargaining equilibria abstract this paper addresses the question of existence of stationary markov perfect equilibria in a class of dynamic games that includes many known bargaining models and models of coalition formation general sufficient conditions for existence of equilibria are currently lacking in a number of interesting environments e g models with non convexities consumption lower bounds or an evolving state variable the main result establishes existence of equilibrium under compactness and continuity conditions without the structure of convexity or strict comprehensiveness used in the extant literature the proof requires a precise selection of voting equilibria following different proposals using a generalization of fatou s lemma

evolution of international stock and bond market integration influence of the european monetary union abstract this paper examines the dynamic relationship between daily stock and government bond returns of selected countries over the past decade to infer the state and progress of inter financial market integration we proceed to empirically investigate the influence of the european monetary union emu on time variations in inter stock bond market integration segmentation dynamics using a two step procedure first we document the downward trends in time varying conditional correlations between stock and bond market returns in european countries japan and the us second we investigate the causality and determinants of this interdependent relationship in particular whether the various macroeconomic convergence criteria associated with the emu have played a significant role we find that real economic integration and the reduction in currency risk have generally had the desired effect on financial integration but monetary policy integration may have created uncertain investor sentiments on the economic future of the emu thereby stimulating a flight to quality phenomenon

a theory of endogenous coalition structures consider an environment with widespread externalities and suppose that bind ing agreements can be written we study coalition formation in such a setting our analysis proceeds by defining on a partition function an extensive form bargaining game we establish the existence of a stationary subgame perfect equilibrium for such a game our main results are concerned with the characterization of equilib rium coalition structures we develop an algorithm that generates under certain conditions an equilibrium coalition structure our characterization results are especially sharp for symmetric partition functions in particular we provide a uniqueness theorem and apply our results to a cournot oligopoly journal of economic literature classification numbers c71 c72 c78 d62 q 1999 academic press

bargaining and value we present and analyze a model of noncooperative bargaining among n participants applied to situations describable as games in coalitional form this leads to a unified solution theory for such games that has as special cases the shapley value in the transferable utility tu case the nash bargaining solution in the pure bargaining case and the recently introduced maschler owen consistent value in the general nontransferable utility ntu case moreover we show that any variation in a certain class of our bargaining procedure which generates the shapley value in the tu setup must yield the consistent value in the general ntu setup

the incidence of regional taxes in a general equilibrium framework abstract a six region general equilibrium model of the united states is presented and used to evaluate the incidence of state local business taxes because this formulation allows for labor and capital mobility the provision of public goods distinctions between household and business level taxes and the interaction of state local and federal tax systems numerical analysis is particularly appropriate simulations show that capital improvements generally bear the average economy wide burden of business taxes levied on them regardless of whether a multilateral or unilateral policy change is considered or whether the alternative tax is imposed on immobile resources or household income however for other factors of production both mobile andimmobile the effects vary across scenarios a demonstration that incidence should not be thought of as a single outcome or value

international business cycle co movement the role of fdi this article investigates the relationship between fdi and business cycle synchronization in the period 1982 to 2011 for eight industrialized countries we find that more synchronized business cycles are associated with stronger fdi relations in the period 1995 to 2011 but not before 1995 more intensive fdi links are also associated with a greater vulnerability to lagged output spillovers from abroad our findings suggest that fdi has become a separate channel through which economies may affect each other and that fdi stocks are now an essential aspect of economic interdependence

coalition formation and bargaining protocols a review of the literature this paper offers a review of the vast literature regarding bargaining and coalition formation this topic has been generally described as the attempt to provide strategic foundations to cooperative solution concepts it can therefore be seen as the linking ring between the non cooperative and the cooperative game theoretic approach to coalition formation its central role in economic theory and its relatively long history that goes back to the nash program have fostered a large academic production including surveys nonetheless this paper will focus on an aspect that is often neglected in the dedicated surveys the specificities of the bargaining protocols leading to different outcomes although generally downgraded to the rank of details the differences in bargaining protocols even when minor can cause significant changes in fundamental aspects such as the possibility to reach full cooperation the distribution of final pay offs and the time taken to reach an agreement focused on externalities free games therefore on bargaining protocols sustaining solution concepts for cooperative games in characteristic function form the paper aims at providing a brief but exhaustive review of the topic that could result in a very useful tool for any researcher approaching the subject of coalitional bargaining

a one stage model of link formation and payoff division abstract in this paper we introduce a strategic form model in which cooperation structures and divisions of the payoffs are determined simultaneously we analyze the cooperation structures and payoff divisions that result according to nash equilibria strong nash equilibria and coalition proof nash equilibria we find that no cycle will be formed if a player claims a positive amount for the formation of one of its links and that a player does not necessarily profit from a central position in a cooperation structure journal of economic literature classification numbers c71 c72

bond market and stock market integration in europe a smooth transition approach this article investigates whether there has been a structural increase in financial market integration in nine european countries and the us in the period 1980 to 2003 we employ a garch model with a smoothly time varying correlation to estimate the date of change and the speed of the transition between the low and high correlation regimes our test produces strong evidence of greater comovement across the board for both stock markets and government bond markets dates of change and speeds of adjustment vary widely across country linkages stock market integration is a more gradual process than bond market integration the impact of european monetary union emu is rather limited as it has mainly affected the timing of bond market correlation gains but hardly their size and has had little discernible effect on stock market integration

labor mobility and the incidence of the residential property tax abstract this paper analyzes the incidence of the residential property tax in an economy with two communities workers are perfectly mobile so that their utility levels are equal in the two communities in equilibrium the property tax is modeled as an ad valorem tax on housing services

individual and collective time consistency this paper reconsiders the strotz pollak problem of consistent planning and argues that a solution to this problem requires a refinement of subgame perfectness such a refinement is offered through an analysis based on greenberg s theory of social situations the properties of this refinement are investigated and illustrated a unifying framework is presented whereby consistent one person planning as a problem of individual time consistency and renegotiation proofness as a problem of collective time consistency are captured through the same general concept

a foundation for markov equilibria in sequential games with finite social memory we study stochastic games with an infinite horizon and sequential moves played by an arbitrary number of players we assume that social memory is finite every player except possibly one is finitely lived and cannot observe events that are sufficiently far back in the past this class of games includes games between a long run player and a sequence of short run players and games with overlapping generations of players an equilibrium is purifiable if some close by behaviour is consistent with equilibrium when agents payoffs in each period are perturbed additively and independently we show that only markov equilibria are purifiable when social memory is finite thus if a game has at most one long run player all purifiable equilibria are markov

bargaining under incomplete information this paper presents and analyzes a bargaining model of bilateral monopoly under uncertainty under the bargaining rule proposed the buyer and the seller each submit sealed offers that determine whether the good in question is sold and the transfer price the nash equilibrium solution of this bargaining game implies an offer strategy of each party that is monotonic in its own reservation price and depends on its assessment of the opponent s reservation price issues of relative bargaining advantage and efficiency are examined for a number of special cases finally we discuss the appropriateness of the nash solution concept

extending renegotiation proofness to infinite horizon games abstract this paper extends the concept of a pareto perfect equilibrium to infinite horizon games and offers a definition that covers both finitely and infinitely repeated games an equilibrium is said to be pareto perfect if admitted by a pareto perfect social norm a pareto perfect norm admits an equilibrium if and only if it cannot be profitably renegotiated in a norm observing manner at a future contingency the defined concept is compared to concepts that other writers have proposed it departs from other concepts by insisting that nonviable equilibria be defeated through renegotiation by viable ones and by not imposing a stationarity assumption

taxation and the tiebout model the differential effects of head taxes taxes on land rents and property taxes on the theory of state and local public finance is the seminal paper by charles tiebout 1956 tiebout constructed a multijurisdictional model in which independent local governments offer a wide variety of expenditure and tax policies and perfectly mobile consumers reveal their preferences for local public goods through their choice of residential community he argued that under such circumstances local public service provision would be efficient the tiebout model has formed the basis of a vast number of subsequent articles in the state and local public finance literature and has also been very influential in urban and regional economics the efficiency properties of various tiebout type models of local public good provision have been examined and the role of politics in these models has been debated at length in this literature of more direct relevance to this paper however is the fact that although tiebout had little to say directly about taxation simply assuming the existence of head taxes subsequent analyses have used adaptations of this model to examine the effects of local head taxes land taxes and property taxes it is the literature on the efficiency and distributional effects of alternative local taxes that is the subject of this survey 1

dynamic linkages among carbon energy and financial markets a smooth transition approach this article explores how price linkages between carbon allowances and market fundamentals in the eu emissions trading scheme eu ets vary over time i adopt a multivariate garch model that allows the conditional correlation between carbon energy and financial prices to change smoothly across regimes governed by functions of two transition variables that explain why price linkages vary i use i time as transition variable to allow for structural changes associated with institutional advances in the eu ets and ii implied volatility to account for heterogeneity in the behaviour of correlations in times of distress compared to calm periods the results point to a new pricing regime with much closer carbon energy price linkages in the second phase of the eu ets furthermore i find that correlations depend on market uncertainty conditions which exposes the link between carbon and financial markets due to common macroeconomic shocks during the current financial crisis

the incidence of heterogeneous residential property taxes abstract in an economy with multiple tax jurisdictions the distribution of the burden of heterogeneous residential property taxes is shown to depend on the elasticity of demand for housing the elasticity of substitution between land and capital in housing production the elasticity of supply of land to individual tax jurisdictions and the degree of population mobility between tax jurisdictions it is demonstrated that the excise effects of the residential property tax may not cancel across jurisdictions and the average rate of tax may overstate or understate the burden on residential capital

efficient coalitional bargaining with noncontingent offers abstract a new feature pertaining to proposer s ability to implement offers is introduced in the extensive form bargaining mechanism studied in okada 1996 this mechanism is used to analyze the coalitional setting of strictly supermodular games the new feature in the mechanism is that the proposer has a choice to implement his proposal with any subset of responders who have accepted it thus the institutional feature of every responder has veto power is relaxed here it is shown that for all sufficiently high discount factors there exists an efficient subgame perfect equilibrium in pure stationary strategies sspe whose limiting outcome is the core constrained nash bargaining solution moreover all efficient sspe are payoff equivalent in the limit as 1

renegotiation proof equilibria in repeated prisoners dilemma abstract in this note it is shown that the requirement of weak renegatiation proofness does not eliminate any subgame perfect equilibrium outcome of the repeated prisoner s dilemma specifically it is demonstrated that when players are sufficiently patient any feasible and individually rational outcome can be sustained by means of an equilibrium in which the punishing player always profits by carrying out the punishment

regional versus global cooperation for climate control abstract this paper considers whether international environmental public goods provision such as mitigation of climate change is better dealt with through regional cooperation than through a global treaty previous research suggests that at best a global environmental treaty will achieve very little at worst it will fail to enter into force using a simple dynamic game theoretic model with weakly renegotiation proof equilibrium as solution concept we demonstrate that two agreements can sustain a larger number of cooperating parties than a single global treaty the model provides upper and lower bounds on the number of parties under each type of regime it is shown that a regime with two agreements can pareto dominate a regime based on a single global treaty we conclude that regional cooperation might be a good alternative or supplement to global environmental agreements

legislative bargaining under weighted voting organizations often distribute resources through weighted voting we analyze this setting using a non cooperative bargaining game based on the baron ferejohn 1989 model unlike analyses derived from cooperative game theory we find that each voter s expected payoff is proportional to her voting weight an exception occurs when many high weight voters exist as low weight voters may expect disproportionately high payoffs due to proposal power the model also predicts that ex post the coalition formateur the party chosen to form a coalition will receive a disproportionately high payoff using data from coalition governments from 1946 to 2001 we find strong evidence ofsuch formateur effects

coalition proof nash equilibria and the core in three player games abstract we study 3 person noncooperative games of coalition formation where the underlying situation is represented by a game in coalitional form without side payments we look at coalition proof nash equilibria and we show that if the underlying game is balanced in the sense of scarf then except for indifferences the grand coalition forms and the payoff is in the core if the underlying game has an empty core then only a two player coalition can form and the payoff to its members is given by the respective coordinates of a unique outside options vector if the underlying game is not balanced but has a nonempty core then either one of the two mentioned cases may hold

long term global market correlations the correlation structure of the world equity markets varied considerably over the past 150 years and was high during periods of economic integration we decompose diversification benefits into two parts one component due to variation in the average correlation across markets and a another component due to the variation in the investment opportunity set from this we infer that periods of globalization have both benefits and drawbacks for international investors globalization expands the opportunity set but as a result the benefits from diversification rely increasingly on investment in emerging markets

coalition formation as a dynamic process abstract we study coalition formation as an ongoing dynamic process with payoffs generated as coalitions form disintegrate or regroup a process of coalition formation pcf is an equilibrium if a coalitional move to some other state can be justified by the expectation of higher future value compared to inaction this future value in turn is endogenous it depends on coalitional movements at each node we study existence of equilibrium pcfs we connect deterministic equilibrium pcfs with unique absorbing state to the core and equilibrium pcfs with multiple absorbing states to the largest consistent set in addition we study cyclical as well as stochastic equilibrium pcfs

property taxes and property values evidence from proposition 212 abstract we examine the effect of proposition 2 1 2 on revenues and housing prices in massachusetts communities that were initially constrained by the law saw large increases in state aid and the use of fees we use these initial constraints as instruments for changes in other components of revenue while treating the change in the property tax as exogenously determined by proposition 2 1 2 our results strongly suggest that communities that were able to increase their property taxes more rapidly saw greater increases in their housing values in the period following passage of the law

inter generational transfers and common values in a society abstract we present a model in which inter generational transfers are interpreted as a cooperative agreement across generations cooperation is obtained by allowing each generation to share common principles defined as a set of strategies which answer the question if an inter generational transfer was to be designed which one would be chosen under the premise that each generation shares with the next generations not only the outcome of the process but also the reasoning that leads to this outcome

justifiable punishments in repeated games abstract in repeated games subgame perfection requires all continuation strategy profiles must be effective to enforce the equilibrium they serve as punishments should deviations occur it does not require whether a punishment can be justified for the deviation which creates a great deal of freedom in constructing equilibrium strategies resulting the well known folk theorem we introduce justifiable punishments in repeated games after one player deviates the corresponding continuation or punishment is justifiable if either the deviation is bad to the other player or the continuation itself is good to the other player we characterize the set of payoff vectors that can be supported by subgame perfect equilibria with justifiable punishments as the discount factor goes to one this limiting set of equilibrium payoffs can be quite different from the set of subgame perfect equilibrium payoffs any efficient feasible and strictly individually rational payoff can be supported by equilibrium with justifiable punishments

optimal cartel equilibria with imperfect monitoring abstract there exist optimal symmetric equilibria in the green porter model 4 8 having an elementary intertemporal structure such an equilibrium is described entirely by two subsets of price space and two quantities the only production levels used by firms in any contingency the central technique employed in the analysis is the reduction of the repeated game to a family of static games

the effects of communication on the partnership solution to the commons organizing individual appropriators into output sharing groups has been found to effectively solve the tragedy of the commons problem we experimentally investigate the robustness of this solution by introducing different channels of communication that naturally arise from group competitions in the absence of communication we confirm that output sharing can introduce sufficient free riding to offset over harvesting and results in full efficiency allowing local communication within output sharing groups substantially decreases this efficiency enhancement because it reduces free riding and boosts between group competition yet the efficiency level is still significantly higher than that achieved when global communication is allowed among all appropriators in a conventional common pool resource without output sharing the efficiency reducing effect of local communication is mitigated when random partners instead of fixed partners are sharing output over time and is nearly eliminated when random partners are formed with users who belong to different communication groups

measuring european financial integration in this paper we present a set of specific measures to quantify the state and evolution of financial integration in the euro area five key markets are considered namely the money corporate bond government bond credit and equity markets building upon the law of one price we have developed two types of indicators that can be broadly categorized as price based and news based measures we have complemented these measures by a number of quantity based indicators mainly related to the evolution of the home bias results indicate that the unsecured money market is fully integrated while integration is reasonably high in the government and corporate bond markets as well as in the equity markets the credit market is among the least integrated especially in the short term segment

confining the coase theorem contracting ownership and free riding if individuals own the right to take any action that they please and are free to contract about behaviour will outcomes be efficient in all situations that is does the coase theorem hold we study this classic question through the lens of a non cooperative model of contract negotiations considering both compulsory and voluntary participation in negotiations in either case we find that all consistent equilibria of the contracting game are efficient in the case of two players but if participation is voluntary and there are more than two players there are situations in which all consistent equilibria are inefficient specifically the provision of public goods tends to be inefficiently low due to strategic abstention from contracting free riding on others agreements can be avoided if individuals do not own all their actions when actions involve the use of assets efficient action ownership may correspond to collective rather than individual asset ownership

emu and european stock market integration the launch of the single currency in europe in january 1999 was preceded by a period of regulatory harmonization convergence in bond yields and inflation rates and strict fiscal policy across the eurozone countries we examine whether the 1990s also were characterized by increased stock market integration the results indicate that as forward interest differentials benchmarked against germany and inflation differentials benchmarked against the three best performing states shrank toward zero stock markets converged toward full integration the united kingdom a country that chose not to enter the eurozone shows no such increase in stock market integration

a communication proof equilibrium concept department of economics universidad carlos iii de madrid 28903 getafe spainreceived february 4 1992 revised october 24 1994this paper proposes an equilibrium concept for the classes of environments inwhich players can communicate with each other but cannot make bindingagreements the communication proof equilibrium is intended to be regarded as anextension of both coalition and renegotiation proof equilibria conceptual founda tions for this particular definition are discussed as it is confronted with otherdefinitions in these environments journal of economic literature classificationnumber c72

a noncooperative theory of coalitional bargaining the authors explore a sequential offers model of n person coalitional bargaining with transferable utility and with time discounting their focus is on the efficiency properties of stationary equilibria of strictly superadditive games when the discount factor delta is sufficiently large it is shown that delay and the formation of inefficient subcoalitions can occur in equilibrium the latter for some or all orders of proposer however efficient stationary equilibrium payoffs converge to a point in the core as delta approaches one strict convexity is a sufficient condition for there to exist an efficient stationary equilibrium payoff vector for sufficiently high delta

exchange rate regime volatility and international correlations on bond and stock markets focusing on the recent experience of the ems the paper examines the behavior of domestic daily returns on bond and stock markets with the objective of identifying whether there exist significant differences in the patterns of volatilities and international correlations between erm and non erm countries and across alternative episodes of erm exchange rate variability the paper provides substantial evidence that a credible peg is associated with a decline in bond market volatility the analysis also shows that an increase in exchange rate volatility is accompanied by a decline in international correlations between bond and to a lesser extent stock markets c 1999 published by elsevier science ltd all rights reserved

renegotiation in repeated games with side payments abstract we consider repeated games with side payments players have an endowment of wealth in each period in which transfers can be made we show that if endowments are large enough and the common discount factor high enough then a strongly renegotiation proof equilibrium srp in the sense of farrell and maskin exists as the discount factor goes to 1 the set of srp payoffs converges to the set of efficient individually rational payoffs these results provide a justification for the efficiency principle when agreements are not enforceable journal of economic literature classification numbers c73 d23 l14

a unified approach to testing for serial correlation in stock returns this article provides a unified approach for testing serial correlation in stock returns the authors describe a general class of statistics that are linear combinations of consistent estimators of autocorrelations as special cases they show that this class captures many of the statistics studied in the recent finance and macroeconomics literature using this result the authors then provide a common perspective on the asymptotic distribution and power of these statistics copyright 1994 by university of chicago press

identifying the common component of international economic fluctuations a new approach in this paper we develop an aggregation procedure using time varying weights for constructing the common component of international economic fluctuations the methodology for deriving time varying weights is based on some stylised features of the data documented in the paper the model allows for a unified treatment of cyclical and seasonal fluctuations and also accommodates the dynamic propagation of shocks across countries we find evidence for a world business cycle as well as evidence for a distinct european common component we also find some evidence that macroeconomic fluctuations have become more closely linked across industrial economies in the period after 1973 the world economy has become more closely integrated in recent years due to increasing trade and financial flows across countries this has spurred interest in the question of how the ongoing phenomenon of globalisation has affected the transmission and propagation of business cycle fluctuations across national borders an important question in this context is whether a substantial fraction of economic fluctuations are country specific or if there exists a world business cycle which might be defined as fluctuations that are common across all countries more generally the comovement of macroeconomic aggregates across different countries has become a topic of increasing interest in both academic and policy circles these issues have implications in a number of dimensions an empirical analysis of the relative importance of country specific versus common international fluctuations is of relevance for determining the structure of certain classes of international business cycle models from a policy perspective strong comovement of output across countries at business cycle frequencies implies that external trade would be unlikely to play a significant role in dampening fluctuations domestic policies aimed at affecting the real exchange rate and thereby attempting to boost net exports in the short run would then tend to have limited impact the degree of synchronisation of business cycles across countries also has important implications for short run international policy coordination and for assessing the feasibility of monetary unions therefore identifying and analysing the common component of international economic fluctuations is relevant from a number of different perspectives

strategic delay in bargaining this paper analyses a bargaining model with incomplete information in which the time between offers is an endogenous strategic variable we find equilibria involving a delay to agreement that is due to the use of strategic time delay by bargainers to signal their relative strength under some specifications of the parameters delay is present in the unique sequential equilibrium whose beliefs satisfy one intuitive restriction this delay does not vanish as the minimal time between offers becomes small