The Economics of Imperfect Markets

This book is one of the ?nal products of a research project on the effects of market imperfectionson economic behavior and decisions. The project was put together by four Italian universities (Universita ` di Roma ¿Tor Vergatä and ¿La Sapienzä U- versita ` Cattolica del Sacro Cuore ¿ Piacenza and the Universita ` di Urbino ¿Carlo Bo¿) in 2005 and funded by the Italian Ministry of Higher Education and Research for the period 2006¿2007. The research title of the project ¿Corporate governance, ?nancial systems and ?rms¿ performances¿ was indicative of its agenda: to inv- tigate the role of market imperfections and their interactions on ?rms¿ decisions. In 2006 (May 12) the research group held the ?rst conference at the Universita ` di Urbino where intermediate results were ?rst presented and discussed with o- standing scholars from US, UK, and Italian universities, and the European Central Bank. The book reproduces the papers presented at the Universitad ` iRomäLa Sapienzä conference (May 16¿17 2008) and is organized in two parts. The ?rst one discusses imperfectionsthat are mainly related to the working of ?nancial m- kets. The second part includes contributions which focus on different topics of real market imperfections. We wish to thank Steve Nickell, Philip Vermeulen and all the participants at the Urbino and Rome conferences who made both events extremely productive with their scienti?c contributions. We are especially grateful to Bob Chirinko who p- ticipatedinbothconferencesandconstantlyencouragedustocarryoutourscienti?c project on the economics of imperfect markets.