This paper studies dynamic non-linear taxation in a two-period model without government commitment and a continuum of agents with privately known skill parameters, which are constant overtime. The government is utilitarian but cannot commit at t=1 to the tax scheme that she will propose at t=2....

In the standard model of dynamic interaction, players are assumed to receive public signals according to some exogenous distributions for free. We deviate from this assumption in two directions to consider an aspect of information structure in a more realistic way. We assume that signals are...

Social insurance arrangements that are optimal from the perspective of a utilitarian planner confronting a population of privately informed agents frequently exhibit an "immiseration" property - with probability 1 an agent's continuation utility will drift downwards to its minimal level. Thus,...

In this paper, we analyze the problem of store design when consumers have preferences with temptation and self-control, as introduced by Gul and Pesendorfer (2001). We say that a monopolist designs its stores when it chooses the number of stores to open and the quality and price of the goods to...

I analyze the implications of moral hazard in dynamic economy with production. In particular, I add agency frictions to a benchmark stochastic growth model, by assuming that firms observe output but hours worked and productivity are unobservable. I cast the problem as a continuous time principal...

We study a multiperiod principal-agent problem with moral hazard in which the agent is required to exert effort only in the initial period of the contract. The effort choice of the agent in this first period determines the conditional distribution of output in the following periods. The paper...

Asset markets are characterized by slow booms and sudden crashes. Lending rates, for example, are more likely to experience big jumps rather than big drops. We focus on the comparison of this pattern across countries. First, we document that lending rates are more asymmetric on economies with...