A microeconomic model of supply and demand for political contributions is developed. The supply is derived from the behavior of firms which want to maximize the expected gain from supporting political candidates in an election campaign. These firms allocate funds to opposing candidates, and...

We model the design of labor market institutions in an economy characterized by moral hazard and irreversible investment. In this setting, the environment setting affects the bargaining power of labor. At the optimum the allocation of bargaining power balances the aforementioned frictions. We...

A method for calculating the marginal cost of industrial power cuts is developed. Firms are assumed to hedge against outages by acquiring back-up generators. The marginal cost of back-up power enables us to infer the marginal cost of a power cut.

Trade is sequential: buyers arrive in batches and each batch completes trade before the next arrives. Producers allocate the available supply among all potential batches of buyers. Inventories accumulate whenever a batch does not arrive. Shocks to cost and demand are serially independent. There...