The link between measured risk aversion and the decision to become an entrepreneur iswell established, but the link between risk preferences and entrepreneurial success is not.Standard theoretical models of occupational choice under uncertainty imply a positivecorrelation between an...

This paper reviews and synthesizes the theory of information economics and empiricalevidence on how information changes the behavior of consumers, households and firms. I show thatconsumers respond to new information in food experiments but perhaps not in retirement accountmanagement. Some...

For the first 13 years after entry, the hazard rate for firm exits is persistently higher forurban than rural firms. While differences in observed industry market, local marketand firm attributes explain some of the rural-urban gap in firm survival, rural firmsretain a survival advantage 25%...

Researchers have incorporated labor or credit market frictions in isolation within simple neoclassical models to open up a role for institutions, inject realism into their models and examine the impact of these distortions on output and employment. We present an overlapping generations model...

The objective of this paper is to identify the role of memory in repeated contracts with moral hazard in financial intermediation. We use the database we have built containing the contracts signed by the European Bank for Reconstruction and Development EBRD between 1991 and 2003. Our framework...

We study firms' corporate governance in environments where possibly heterogeneous shareholders compete for possibly heterogeneous managers. A firm, formed by a shareholder and a manager, can sign either an incentive contract or a contract including a Code of Best Practice. A Code allows for a...

This paper assesses the merits of countercyclical bank balance sheet regulation for the stabilization of financial and economic cycles and examines its interaction with monetary policy. The framework used is a dynamic stochastic general equilibrium model with banks and bank capital, in which...