In this paper, we introduce interdependent preferences to a classical one-to-one matching problem that allows for the prospect of being single, and study the existence and properties of stable matchings. We obtain the relationship between the stable set, the core, and the Pareto set, and give a...

This paper studies a competitive general equilibrium model with default and endogenous collateral constraints. Even though all collateralized contracts are allowed, the possibility and desirability of trade in spot markets (or the equivalent trade in ex ante asset backed securities) creates...

Two individuals may choose to enter a coresidential relationship, which may or may not include joint property ownership and raising children. In addition to that, individuals may decide to formalize this contractual relationship by holding a marriage ceremony. The literature on coresidential...

Weitzman (1976) provides a foundation for net national product of a competitive economy as the annuity equivalent of the present discounted value of maximized consumption. This paper considers how Weitzman's rule should be modified if the competitive equilibrium is affected by the presence of...

We introduce labour market imperfections (i.e. unions and the existence of a wage floor) in a finance-constrained monetary economy with heterogenous agents and increasing returns to scale due to labour and capital productive externalities. We find that indeterminacy emerges for empirically...

We discuss the effects of unions in the labour market on steady-state multiplicity and welfare, and on the occurrence of local indeterminacy, local bifurcations and (stochastic and deterministic) endogenous fluctuations driven by self-fulfilling expectations. We consider an overlapping...

When there are three parties, it is well known that the Coase Theorem may not hold even when there are no transaction costs, due to the emptiness of the core of the corresponding cooperative game [Aivazian and Callen (1981)]. We show that the standard Coasean bargaining game involving three...

We consider an economy where production generates externalities, which can be reduced by additional firm level expenditures. This requires firms to raise outside financing, leading to deadweight loss due to a standard agency problem vis-à-vis outside investors. Policy is constrained as firms...