"Climate Change and Incentives to Cooperate in Local Commons", 2025.
This paper analyzes incentives to cooperate in maintenance of local commons. Climate change, modeled as Markov process with a probability of permanent reduction in productivity, reduces both the value of the relationship and the temptation to freeride. Cooperation incentives are improved because lower temptation is dominant. Therefore, the effect of climate change is mitigated by higher degree of cooperation – but only if productivity is initially so high that first best cooperation is not possible. While climate change results in full reduction of surplus if productivity is initially relatively low and cooperation at the first best level is already sustainable.
"Price Escalation in Service Provision" (with Hans Gersbach), 2024. Revise & resubmit Journal of Economics & Management Strategy
We examine Bertrand competition in price and quality of services when suppliers cannot price discriminate between different types of customers. We show that the suppliers specialize in different customer types to soften competition. The suppliers provide first-best quality but there is a continuum of equilibria in prices ranging from zero profit level up to one customer type's valuation. A price cap can protect customers from escalating prices and select a low price equilibrium. Introducing a public supplier is an alternative remedy to price escalation. Our analysis also suggests that banning price discrimination for fairness reasons, when it is feasible, may backfire.
"Who Should Own the Past?" (with Evagelos Pafilis), 2025. Submitted
We examine restitution of cultural goods and its optimal form, i.e. whether restitution should be definite or take the form of a loan. We show that loan can be optimal when the source country becomes indispensable due to its cultural significance, while full restitution is optimal when the host country completes restoration. Valuation changes can lead to restitution, but do not pin down its optimal form. Finally, restitution is not always optimal despite source country’s higher valuation for the cultural good. We apply our analysis to the restitution of Icelandic manuscripts and the proposed loan or restitution of Benin bronzes.
Cooperation and Asymmetries in Common-Pool Resources