We study the liability structure decisions(short-term debt choices) of banks in a general equilibrium setting with multiple banks, depositors and external investors. The externalities appear through secondary market prices (positive) and overall systemic risk (negative). The private optimal choices are positively (negatively) correlated when the sign of the aggregate externality is positive (ne...

This paper uses a two-region, two-period overlapping generations model with international labor mobility to examine the efficacy of using tax policy to internalize the externalities created by international labor migration. While a brain drain tax has a substantial limiting effect on labor migration and a small negative effect on per worker growth, it is found to be a viable solution to the neg...

This paper analyses a two-sidedmarket in which two platforms compete against each other. One side, the advertisers, exerts a negative externality on the other side, the users. It is shown that if platforms can charge advertisers only, a higher degree of competition for users can lead to higher profits because competition on the advertisers’ side is reduced. If platforms can charge users as well...

For many high-tech and Internet-related products, utility to consumers depends in part on the size of the user base, a phenomenon called network externality. A firm with a portfolio of these and other products – that are often asymmetric in their degree of network externality or marginal cost – may have to look beyond the traditional strategies of pure components, pure bundling and mixed bundli...

In this paper we analyze the spatial dynamics of a class of systems in which many agents continually reassess decisions of where to locate in a given region. Each agent gives rise to an externality whose impact diffuses to other agents. Thus every agent experiences a composite of externalities emitted by other agents. We term this composite a spatial externality. On the one hand, the level of t...

Using a general multi-country equilibrium model with a multinational enterprise, this paper investigates the efficiency properties of separate accounting and formula apportionment. If governments are large, i.e. take into account the effect of their statutory tax rate on the interest rate, and maximize tax revenues, tax rates under separate accounting may be inefficiently high while tax rates u...

Purpose – The purpose of this paper is to investigate different effects of three network externality factors, i.e. local network size, network strength, and total network size, on online messenger, online community, chat room and e-mail services. Design/methodology/approach – In the paper hypotheses are tested with a regression model using a survey data collected from 107 MBA students at a busi...