I argue in favor of a competitive screening approach for studying the question of coalition formation in exchange economies under asymmetric information. I obtain a new notion of core that refines Wilson (1978)'s coarse core. It is nonempty under the standard regularity conditions. I also...

This paper analyzes a bilateral trade problem where the seller makes hidden investment that influences the buyer's private valuation. Complete contracts can be written on observable trade decisions. It is shown that efficiency level in investment and trade is negatively related to the scope of...

In this paper, we formalize the idea of human capital as the ability to follow and enforce the rules necessary for orderly conduct of economic transactions. People in the US and other developed countries stand in lines while waiting for the bus, etc., while in many developing countries lines...

The inability of a wide array of dynamic stochastic general equilibrium (DSGE) models to generate fluctuations that resemble actual business cycles has lead to the use of habit formation in consumption. For example, habit formation has been shown to help explain the negative response of labour...

Most Latin American countries experienced their last peak in output per capita relative to the United States’ between 1971 and 1982. Prior to this peak per capita output was rapidly catching up to the developed world. Twenty years after the peak the average country’s relative per...

In this paper, we set out the JEM (Japanese Economic Model), a large macroeconomic model of the Japanese Economy. Although the JEM is a theoretical model designed with a view to overcoming the Lucas (1976) critique of traditional large macroeconomic models, it can also be used for both...

In this paper we characterize the optimal allocation mechanism for $N$ objects, (permits), to $I$ potential buyers, (firms). Firms' payoffs depend on their costs, the costs of competitors and on the final allocation of the permits, allowing for externalities, substitutabilities and...

In this paper we adopt Granovetter's view expressed in his famous article ''Economic Action and Social Structure: The Problem of Embeddedness'' , where he argues that the concept of man in economics is extremely undersocialized because it ignores the importance of social networks. In so doing...

This paper considers the parametric inference of a wide range of structural econometric models. The class of models considered includes those with parameter-dependent support and those derived from game-theoretic models. Inference of those models has raised some important econometric issues....