Narrow Results

The partition function approach is applied to study coalition formation in the Northeast Atlantic mackerel fishery in the presence of externalities. Atlantic mackerel is mainly exploited by the European Union (EU), the United Kingdom (UK), Norway, the Faroe Islands and Iceland. Two games are considered. First, a four-player game where the UK is still a member of the EU. Second, a five-player game where the UK is no longer a member of the union. Each game is modeled in two stages. In the first stage, players form coalitions following a predefined set of rules. In the second stage, given the coalition structure that has been formed, each coalition chooses the economic strategy that maximizes its own net present value of the fishery, given the behavior of the other coalitions. The game is solved using backward induction to obtain the set of Nash equilibria coalition structures in pure strategies, if any. We find that the current management regime is among the stable coalition structures in all eight scenarios of the four-player game but in only one case of the five-player game. In addition, stability in the five-player game is sensitive to the growth function applied and the magnitude of the stock elasticity parameter.

In the 12 months from the middle of June 2016 to the middle of June 2017, a number of events occurred in a relatively short period of time, all of which either had, or had the potential to have, a considerably volatile impact upon financial markets.

The events referred to here are the Brexit referendum (23 June 2016), the US election (8 November 2016), the 2017 French elections (23 April and 7 May 2017) and the surprise 2017 UK parliamentary election (8 June 2017).

All of these events—the Brexit referendum and the Trump election in particular—were notable both for their impact upon financial markets after the event and the degree to which the markets failed to anticipate these events. A natural question to ask is whether these could have been predicted, given information freely available in the financial markets beforehand. In this paper, we focus on market expectations for price action around Brexit and the Trump election, based on information available in the traded foreign exchange options market.