Leaving the prison: A discussion of the Iterated prisoner`s dilemma under preferential partner selection.

Outside prison agents do not only ehoose a game strategy but also a game partner. In this paper players are finite automata and willing to interaet only if their expected payoff exeeeds an endogenously evolving aeeeptable minimum. In the resulting behavioural strueture the initial population is subdivided aeeording to players' degree of exploitiveness. If the number of eooperators is at least two, eooperators will be better off than defeetors. If more sueeessful automata reproduce, simulations show that due to partner seleetion eooperative behaviour is irnmune to invading mutants even if the life-span of generations is short.Prisoner`s dilemma; Partner selection; Finite automata; Matching;

Democracy and the curse of natural resources

We propose a theoretical model to explain empirical regularities related to the curse of natural resources. This is an explicitly political model which emphasizes the behavior and incentives of politicians. We extend the standard voting model to give voters political control beyond the elections. This gives rise to a new restriction into our political economy model: policies should not give rise to a revolution. Our model clarifies when resource discoveries might lead to revolutions, namely, in countries with weak institutions. Natural resources may be bad for democracy by harming political turnover. Our model also suggests a non-linear dependence of human capital on natural resources. For low levels of democracy human capital depends negatively on natural resources, while for high levels of democracy the dependence is reversed. This theoretical finding is corroborated in both cross section and panel data regressions

Civil War and Foreign Influence

We study a symmetric information bargaining model of civil war where a third (foreign) party can affect the probabilities of winning the conflict and the size of the post conflict spoils. We show that the possible alliance with a third party makes peaceful agreements difficult to reach and might lead to new commitment problems that trigger war. Also, we argue that the foreign party is likely to induce persistent informational asymmetries which might explain long lasting civil wars. We explore both political and economic incentives for a third party to intervene. The explicit consideration of political incentives leads to two predictions that allow for identifying the influence of foreign intervention on civil war incidence. Both predictions are confirmed for the case of the U.S. as a potential intervening nation: (i) civil wars around the world are more likely under Republican governments and (ii) the probability of civil wars decreases with U.S. presidential approval rates.

Parents, Television and Cultural Change

This paper develops a model of cultural transmission where television plays a central role for socialization. Parents split their free time between educating their children which is costly and watching TV which though entertaining might socialize the children to the wrong trait. The free to air television industry maximizes advertisement revenue. We show that TV watching is increasing in cultural coverage, cost of education, TV's entertainment value and decreasing in the perceived cultural distance between the two traits. A monopolistic television industry captures all TV watching by both groups if the perceived cultural distance between groups is small relative to the TV's entertainment value. Otherwise, more coverage will be given to the most profitable group where profitability increases in group size, advertisement sensitivity and perceived cultural distance. This leads to two possible steady states where one group is larger but both groups survive in the long run. Competition in the media industry might lead to cultural extinction but only if one group is very insensitive to advertisement and not radical enough not to watch TV. We briefly discuss the existing evidence for the empirical predictions of the model.television, socialization, cultural trait dynamics, media coverage.

Cultural Leaders and the Clash of Civilizations

This article builds a micro founded model of the clash of cultures. The clash is defined as the parent's fear of a trait change by their child in an overlapping generations model with intergenerational transmission of cultural traits. The extent of the clash is manipulated by cultural leaders who benefit from the cultural education effort by parents. We identify three channels through which the leaders can affect the clash of cultures: (i) by providing beneficial cultural values, (ii) by claims of cultural superiority and (iii) by cultural alienation, i.e. by inducing cultural dislike towards their own group. We show that all three channels can be in the leader's interest but channels (ii) and (iii) reduce the utility of the leader's goup members. This hints to a strong conflict of interest within groups - between the population at large and the benefactors of radicalization. We further show how the use of alienation relates to the economic opportunities available to a group.

The quality of political institutions and the curse of natural resources.

We propose a theoretical model to explain empirical regularities related to the curse of natural resources, which emphasises the behaviour and incentives of politicians. We extend the standard voting model to give voters political control beyond the elections. This gives rise to a new restriction that policies should not give rise to a revolution. Our model clarifies when resource discoveries might lead to revolutions, namely, in countries with weak institutions. It also suggests that for bad political institutions human capital depends negatively on natural resources, while for high institutional quality the dependence is reversed. This finding is corroborated in cross-section regressions.Recursos naturales; Desarrollo económico; Sistema político;

Secret information acquisition in cournot markets.

Two-stage game models of information aequisition in stochastie oligopolies require the unrealistic assumption that firms observe the preeision of information ehosen by their eompetitors before determining quantities. This paper analyzes seeret information aequisition as a one-stage game. relative to the two-stage game firms are shown to acquire les information. Policy implications based on the two-stage game yield, therefore, too high taxes or too low subsidies for research aetivities. For the case of heterogeneous duopoly it is shown that comparative statics results partly depend on the observability assumption.Information acquisition; Oligopoly; uncertainty; Bayesian equilibrium;

Parents, Television and Cultural Change

This paper develops a model of cultural transmission where television plays a central role for socialization. Parents split their free time between educating their children, which is costly, and watching TV which though entertaining might socialize the children to the wrong trait. The free to air television industry maximizes advertisement revenue. We show that TV watching is increasing in cultural coverage, cost of education, TV’s entertainment value and decreasing in the perceived cultural distance between the two traits. A monopolistic television industry captures all TV watching by both groups if the perceived cultural distance between groups is small relative to the TV’s entertainment value. Otherwise, more coverage will be given to the most profitable group where profitability increases in group size, advertisement sensitivity and perceived cultural distance. This leads to two possible steady states where one group is larger but both groups survive in the long run. Competition in the media industry might lead to cultural extinction but only if one group is very insensitive to advertisement and not radical enough not to watch TV. We briefly discuss the existing evidence for the empirical predictions of the model.television, socialization, cultural trait dynamics, media coverage

Democracy and the curse of natural resources

We propose a theoretical model to explain empirical regularities related to the curse of natural resources. This is an explicitly political model which emphasizes the behavior and incentives of politicians. We extend the standard voting model to give voters political control beyond the elections. This gives rise to a new restriction into our political economy model: policies should not give rise to a revolution. Our model clarifies when resource discoveries might lead to revolutions, namely, in countries with weak institutions. Natural resources may be bad for democracy by harming political turnover. Our model also suggests a non-linear dependence of human capital on natural resources. For low levels of democracy human capital depends negatively on natural resources, while for high levels of democracy the dependence is reversed. This theoretical finding is corroborated in both cross section and panel data regressions.Curse of natural resources, democracy, political game, revolution, human capital.

On the cultural transmission of corruption

We provide a cultural explanation to the phenomenon of corruption in the framework of an overlapping generations model with intergenerational transmission of values. We show that under reasonable parameters the economy has two steady states which differ in their levels of corruption. The driving force in the equilibrium se1ection process is the education effort exerted by parents which depends on the initial distribution of ethics in the population and on expectations about policies in the future. We propose sorne policy interventions which via parents' efforts have long lasting effects on corruption and show the success of intensive education campaigns. We argue that our model exp1ains the differecnes which are observed across countries with similar degrees of economic development and that educating the young is a key element in reducing corruption successfully