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Aversion to Inequality and Segregating Equilibria

Cabrales, Antonio; Calvó-Armengol, Antoni - Barcelona Graduate School of Economics (Barcelona GSE) - 2005

This paper shows that models where preferences of individuals depend not only on their allocations, but also on the well-being of other persons, can produce both large and testable effects. We study the allocation of workers with heterogeneous productivities to firms. We show that even small...

Persistent link: https://www.econbiz.de/10010547201

Testing for Asymmetric Information in Private Health Insurance

Olivella, Pau; Vera-Hernández, Marcos - Barcelona Graduate School of Economics (Barcelona GSE) - 2006

We develop a test for adverse selection and use it to examine private health insurance markets. In contrast to earlier papers that consider a purely private system or a system in which private insurance supplements a public system, we focus our attention on a system where privately funded health...

Persistent link: https://www.econbiz.de/10010547456

Building an Honest Microfinance Organization: Embezzlement and the Optimality of Rigid Repayment Schedules and Joint Liability

Jeon, Doh-Shin; Menicucci, Domenico - Barcelona Graduate School of Economics (Barcelona GSE) - 2006

Kevane (2002). We study the trade-off between the optimal rigid lending contract and the optimal discretionary one and find … that a rigid contract is optimal when the audit cost is larger than gains from insurance. Our analysis explains rigid … insurance can be provided by borrowers themselves under individual liability through a side-contract. …

Persistent link: https://www.econbiz.de/10010851343

Managing Credit Bubbles

Martín, Alberto; Ventura, Jaume - Barcelona Graduate School of Economics (Barcelona GSE) - 2015

We study a dynamic economy where credit is limited by insufficient collateral and, as a result, investment and output … are too low. In this environment, changes in investor sentiment or market expectations can give rise to credit bubbles …, that is, expansions in credit that are backed not by expectations of future profits (i.e. fundamental collateral), but …

Persistent link: https://www.econbiz.de/10011266628

Government Information Transparency

Albornoz, Facundo; Esteban, Joan; Vanin, Paolo - Barcelona Graduate School of Economics (Barcelona GSE) - 2009

This paper studies a model of announcements by a privately informed government about the future state of the economic activity in an economy subject to recurrent shocks and with distortions due to income taxation. Although transparent communication would ex ante be desirable, we find that even a...

Persistent link: https://www.econbiz.de/10010851347

The Political Cost of Reforms

Bonfiglioli, Alessandra; Gancia, Gino - Barcelona Graduate School of Economics (Barcelona GSE) - 2010

This paper formalizes in a fully-rational model the popular idea that politicians perceive an electoral cost in adopting costly reforms with future benefits and reconciles it with the evidence that reformist governments are not punished by voters. To do so, it proposes a model of elections where...

Persistent link: https://www.econbiz.de/10010547124

Labour Market Information Acquisition and Downsizing

Jeon, Doh-Shin; Laffont, Jean-Jacques - Barcelona Graduate School of Economics (Barcelona GSE) - 2003

We study the optimal mechanism for downsizing the public sector which takes into account different informational constraints (complete versus asymmetric information on each workers efficiency) and political constraints (mandatory versus voluntary downsizing). Under complete information, the...

Persistent link: https://www.econbiz.de/10010547125

A Theory of Information Flows

Jeon, Doh-Shin - Barcelona Graduate School of Economics (Barcelona GSE) - 2003

Obtaining information about changes in market conditions is vital for the survival of the firms operating in a changing environment. In this paper, we offer a theory of information flows in a setting in which the principal faces a project choice and needs to induce the agent, who is responsible...

Persistent link: https://www.econbiz.de/10010547251

Displacement, Signaling, and Recall Expectations

Rodréguez-Planas, Néria - Barcelona Graduate School of Economics (Barcelona GSE) - 2011

This paper is the first to present empirical evidence consistent with models of signaling through unemployment and to uncover a new stylized fact using the 1988-2006 DWS, namely that, among white-collar workers, post-displacement earnings fall less rapidly with unemployment spells for layoffs...

Persistent link: https://www.econbiz.de/10010547351

Relying on the Agent in Charge of Production for Project Evaluation

Jeon, Doh-Shin - Barcelona Graduate School of Economics (Barcelona GSE) - 2006

I study the optimal project choice when the principal relies on the agent in charge of production for project evaluation. The principal has to choose between a safe project generating a fixed revenue and a risky project generating an uncertain revenue. The agent has private information about the...

Persistent link: https://www.econbiz.de/10010547373