The value of information is examined in a single-agent environment with unawareness. Although the agent has a correct prior about events he is aware of and has a clear understanding of his available actions and payoffs, his unawareness may lead him to commit information pro- cessing errors and...

This paper provides a set-theoretic model of knowledge and unawareness. A new property called Awareness Leads to Knowledge shows that unawareness of theorems not only constrains an agent's knowledge, but also, can impair his reasoning about what other agents know. For example, in contrast to Li...

We investigate analytically and via Monte Carlo simulations the effects of the inclusion of irrelevant variables in the statistical model, on the cointegration analysis of Johansen (1988, 1991). We show that overspecifying the statistical model does not affect inference about the cointegrating...

Empirical research on group lending is extensive, but without allowance for collateral to mitigate strategic default. Indeed, lack of credit access has motivated microcredit in rural areas of developing countries, where agents with collateral are very rare. As rural communities have tight-knit...

In a global context foreign direct investment (FDI) and migration substitute one another in the matching process between workers and firms. However, as labor flows can lead to the formation of business networks, migration can actually facilitate FDI in the long-run. We first present a stylized...

Estimates for the U.S. suggest that in some sectors productivity enhancing reallocation is the dominant factor in accounting for productivity growth. An open question is whether reallocation is always productivity enhancing. Specifically, in developing countries, market concentration, or...