This paper examines how the dynamics of information influences the dynamics of coordination in an environment with strategic complementarities and heterogeneous expectations. We consider a simple dynamic global game of regime change, in which the status quo is abandoned when a sufficiently large...

We show that it is impossible to achieve collusion in a duopoly when (1) the prices depend only on the sum of the firms' supplies (2) firms are able to respond to new information quickly and (3) the likelihood ratio for detection of each deviation is a continuous process (so that new information...

This paper extends the classic dynamic employer learning model to a setting where there is uncertainty about the productivity value of general human capital, rather than about match-specific value. The focus is on rent extraction, which involves asymmetric common value auctions. Despite employer...

We use household survey data to construct a direct measure of absolute risk aversion based on the maximum price a consumer is willing to pay to buy a risky security. We relate this measure to consumers' endowment and attributes and to measures of background risk and liquidity constraints. We...

Abstract: Focusing on observable default risk's role in loan terms and the subsequent consequences for household behavior, this paper shows that lenders increasingly used risk-based pricing of interest rates in consumer loan markets during the mid-1990s. It tests three resulting predictions....