This paper presents a game-theoretic model of an internationally integrated product market supplied by oligopolistic firms and nationally segmented labor markets, distinguished by country-specific bargaining systems. Unions and firms negotiate wages following national arrangements; then firms choose levels of employment. I analyze the form of wage externalities among countries which determine how institutional changes within a national bargaining system are transmitted to other countries. The model is then utilized to study the influence of product market integration on international wage differentials, and to discuss international centralization and coordination of wage negotiations.
This paper investigates the effects of terror attacks of September 11 on a set of airline stocks listed at various international stock markets. Utilizing the Market Model as the relevant return generating mechanism, we document a structural break in systematic risk (beta) for airline stocks. Moreover, our empirical evidence shows that, apart from the systematic risk, idiosyncratic risk has also substantially increased. In quantitative terms, conditional systematic risk has on average more than doubled, while the percentage it represents over total risk has shown a considerable increase. These results have implications for portfolio diversification and the cost (and ability) of airlines in raising capital.
Our comment on Marjit et al. [Marjit, S., Mukherjee, V., Mukherjee, A., 2000. Harassment, corruption and tax policy. European Journal of Political Economy 16, 75–94.] addresses the equilibrium concept used in the game with imperfect information, Section 4 of the original paper. The solution represented in the original paper does not constitute a perfect Bayesian Nash-equilibrium. We develop an alternative solution of the game given the assumptions made by Marjit et al. [Marjit, S., Mukherjee, V., Mukherjee, A., 2000. Harassment, corruption and tax policy. European Journal of Political Economy 16, 75–94.] and find that the results concerning the optimal amount of over-evaluation of income and the existence of a pooling or separating equilibrium are altered.
Eijffinger et al. [Eur. J. Pol. Econ. 18 (2002) 365] find that the research performance of the National Central Banks (NCBs) of the European System of Central Banks is inversely related to their size, or that “small is beautiful”. Their analysis is based on journal articles published by NCB researchers. In the case of the Bank of Italy, their data does not reflect the true number of papers published. Their conclusions may accordingly require modification.