We study how firm boundaries are affected by the reduction in search costs when business-to-business electronic markets are adopted. Our paper analyzes a multi-tier industry in which upstream parts suppliers incur procurement search costs, and downstream manufacturers incur incentive contracting...

This paper investigates whether there is a non-linear relationship between income and the private transfers received by households in developing countries. If private transfers are unresponsive to household income, expansion of public social security is unlikely to crowd out private transfers,...

Although poverty levels have been diminishing in Mexico since the late 90’s, several regions still show high levels of poverty which are extremely high in some rural areas. The paper addresses the issue of the linkages between sectoral growth (urban/rural) and poverty levels by applying...

Mortgages are one-sided contracts under which the borrower may terminate the contract at any time, while the lender must commit to honoring the terms of the contract throughout its life. There are two aspects to this feature of the contract that are modeled in this paper. The first is that the...

Competitive agents extract in continuous time from a commons. Capital market access allows them to both save and borrow against their extraction stream. When the commons asset grows more quickly than the privately stored one, multiple equilibria are found for intermediate commons endowments. One...

Which pricing kernel restrictions are needed to make low dimensional Markov models consistent with given sets of predictions on aggregate stock-market fluctuations ? This paper develops theoretical test conditions addressing this and related reverse engineering issues arising within a fairly...

In this paper, we analyze the strength and nature of bequest motives in the United States using data from the 2000 Health and Retirement Study (HRS). The results of our analysis suggest that bequest motives are very strong in the United States and that they are altruistically motivated. This...

This paper sets out a theoretical framework for models of the household production and labour supply decisions of families, and estimates empirical specifications on time use survey data containing information on labour supply, domestic work and pure leisure. The models are then compared with...

Recent empirical studies suggest that the average marginal propensity to consume (MPC) has declined. This paper explains the declining trend of the MPC with a standard representative consumer model where borrowing constraints become more relaxed as suggested by data. With an increase in...