i) "An understanding of transaction costs makes the concept of externalities explicitly political." Discuss. Is there a useful role for the notion of externalities in development economics? 

ii) Discuss the different definitions of externalities and their relationship to each other. Why do so many externalities continue to persist in the real world? 

iii) Compare and contrast two competing models of market failures preventing technological catching up in developing countries. 

iv) Evaluate regulation as a policy instrument for addressing negative externalities. What are the implications of your analysis for a developing country attempting to tackle pollution? 

i) Define a Nash equilibrium. What insights can games of coordination with conflict (chicken games) provide for understanding the outcomes of distributive conflicts in the real world? 

ii) Define the conditions under which the Folk Theorem applies to repeated games. What are the implications of the Folk Theorem for identifying equilibria in repeated games? 

iii) Discuss the conditions under which cooperation is likely to emerge in a repeated prisoner’s dilemma game. 

You may also set yourself a specific game theory question for your assessed essay but please check the admissibility and viability of the question with Mushtaq Khan before proceeding.