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...

This paper analyzes the equilibrium trading strategies of informed traders in the presence of market closures defined as periodic predictable stops of trading. We construct a dynamic auction model based on rational strategic behavior with asymmetric information across the agents. Empirical...

We consider a college admissions problem with uncertainty. We realistically assume that (i) students' college application choices are nontrivial because applications are costly, (ii) college rankings of students are noisy and thus uncertain at the time of application, and (iii) matching between...

In the canonical learning model, the multi-armed bandit with independent arms, a decision maker learns about the different alternatives only through his private experience. It is well known that any optimal experimentation strategy for this problem is ex-post inefficient: it sometimes leads the...

We introduce learning based on genetic algorithms in a principal-agent model of optimal contracting under moral hazard. Applications of this setting abound in finance (credit under moral hazard), public finance (optimal taxation, information-constrained insurance), development (sharecropping),...

We analyze a version of Akerlof's market for lemons in which a sequence of buyers make offers to a long-lived seller endowed with a single unit for sale. We consider both the case in which previous offers are observable and the case in which they are not. When offers are observable, trade may...

This paper provides formal treatment to the idea of patenting as a form of market stealing between R&D firms. It extends the creative destruction literature by allowing innovations to build off each other forming a network of ideas. Patent citations keep track of this network. The theory maps...

We identify possible long-run market shares and the long-run asset price dynamics of financial markets with heterogenous interacting agents. This involves stability conditions for a class of difference equation in a random environment, where the random environment is endogenously generated by...

This paper provides an explanation for why the sunk cost bias persists among firms in a competitive environment in which rich learning possibilities are allowed. We envision firms that experiment with cost methodologies that are consistent with real-world accounting practices, including ones...