Abstract and 1. Introduction
A free and fair economy: definition, existence and uniqueness
2.1 A free economy
2.2 A free and fair economy
Equilibrium existence in a free and fair economy
3.1 A free and fair economy as a strategic form game
3.2 Existence of an equilibrium
Equilibrium efficiency in a free and fair economy
A free economy with social justice and inclusion
5.1 Equilibrium existence and efficiency in a free economy with social justice
5.2 Choosing a reference point to achieve equilibrium efficiency
Some applications
6.1 Teamwork: surplus distribution in a firm
6.2 Contagion and self-enforcing lockdown in a networked economy
6.3 Bias in academic publishing
6.4 Exchange economies
Contributions to the closely related literature
Conclusion and References
Appendix
In this section, we provide an application of a free and fair economy to contagion and selfenforcing lockdown in a networked economy. We show how the costs of a pandemic from a virus outbreak can affect agents’ decisions to form and sever bilateral relationships in the economy. Specifically, we illustrate this application by using the contagion potential of a network [Pongou, 2010, Pongou and Serrano, 2013, 2016, Pongou and Tondji, 2018].
\ Consider an economy M involving agents who freely form and sever bilateral links according to their preferences. Agents’ choices lead to a network, defined as a set of bilateral links. Assume that rational behavior is captured by a certain equilibrium notion (for example, Nash equilibrium, pairwise-Nash equilibrium, etc.). Such an economy may have multiple equilibria. Denote by E(M) the set of its equilibria. Our main goal is to assess agent’s decisions in response to the spread of a random infection (for example, COVID-19) that might hit the economy. As the pandemic evolves in the economy, will some agents decide to sever existing links and self-isolate themselves? How does network structure depend on the infection cost?
\ 
\ 
\ 
\ 
\ 
\ 
\ 
\ Interestingly, the value of λ depends on the nature of the virus. Viruses induce different severity levels. For example, COVID-19 and the flu virus have different values, inducing different network configurations in equilibrium. The different network configurations in Figure 2 can therefore be interpreted as the networks that will arise in different scenarios regarding the nature of the virus.
\
:::info Authors:
(1) Ghislain H. Demeze-Jouatsa, Center for Mathematical Economics, University of Bielefeld (demeze jouatsa@uni-bielefeld.de);
(2) Roland Pongou, Department of Economics, University of Ottawa (rpongou@uottawa.ca);
(3) Jean-Baptiste Tondji, Department of Economics and Finance, The University of Texas Rio Grande Valley (jeanbaptiste.tondji@utrgv.edu).
:::
:::info This paper is available on arxiv under CC BY 4.0 DEED license.
:::
\


Western Union CEO said there are “significant opportunities” to utilize stablecoins for sending and receiving money across borders. Financial services company Western Union is set to pilot a stablecoin-based settlement system to modernize its remittance operations for its more than its 150 million customers.During Western Union’s third-quarter earnings call on Thursday, CEO Devin McGranahan said the pilot is “focused on leveraging onchain settlement rails to reduce dependency on legacy correspondent banking systems, shorten settlement windows, and improve capital efficiency.”Western Union processes around 70 million transfers each quarter. Blockchain technology could offer significant advantages over traditional remittance rails and could benefit its customers located in more than 200 countries. Read more
