We look at the life insurance industry to study the properties of long term contracts in a world where consumers cannot commit to a contract. The main issue is how contracts are designed to deal with classification risk. We present a model that captures the main features of this industry. The...

Leasing contracts specify a rental rate and an option price at which the used good can be bought at the termination of the lease. This option price cannot be controlled when the car is sold. We show that in a world with symmetric information this additional control variable is useless;...

An undesirable feature of Akerlof style models of adverse selection is that ownership of" used cars is independent of preferences and is therefore ad hoc. We present a dynamic model" that incorporates the market for new goods. Consumers self-select into buying new or used" goods making ownership...

We study a simple model of a decentralized market game in which firms make directed offers to workers. We focus on markets in which agents have aligned preferences. When agents have complete information or when there are no frictions in the economy, there exists an equilibrium that yields the...

This paper uses a new data set on child-adoption matching to estimate the preferences of potential adoptive parents over U.S.-born and unborn children relinquished for adoption. We identify significant preferences favoring girls and unborn children close to birth, and against African-American...

Cultural transmission arguably plays an important role in the determination of many fundamental preference traits (e.g., discounting, risk aversion and altruism) and most cultural traits, social norms, and ideological tenets ( e.g., attitudes towards family and fertility practices, and attitudes...

We study the dynamics of the distribution of overlapping generation economy with finitely lived agents and inter-generational transmission of wealth. Financial markets are incomplete, exposing agents to both labor income and capital income risk. We show that the stationary wealth distribution is...

This paper analyzes a class of competitive economies with production, incomplete financial markets, and agency frictions. Firms take their production, financing, and contractual decisions so as to maximize their value under rational conjectures. We show that competitive equilibria exist and that...

We study the wealth distribution in Bewley economies with idiosyncratic capital income risk. We show analytically that under rather general conditions on the stochastic structure of the economy, a unique ergodic distribution of wealth displays a fat tail; more precisely, a Pareto distribution in...

We study procrastination in the context of a field experiment involving students who must exert costly effort to complete certain tasks by a fixed deadline. Students display a strong demand for commitment in the form of self-imposed deadlines. However, deadlines appear not to increase task...