We analyze households' joint investment decisions for financial wealth and homes.In our bivariate censored regression model with endogenous switching, fixed costs or transaction costs are captured by a threshold that has to be passed before the purchase.The model allows for spill-over effects of...

In this paper we model expenditure on housing for owners and renters by means of endogenous switching regression models using cross-section data. We explain the share of housing in total expenditure from family characteristics and total expenditure, where the latter is allowed to be endogenous....

In this paper we model expenditure on housing for owners and renters by means of endogenous switching regression models for panel data. We explain the share of housing in total expenditure from a household specific effect, family characteristics and total expenditure, where the latter is allowed...

Homestead exemptions to personal bankruptcy allow households to retain their home equity up to a limit determined at the state level. Households that may experience bankruptcy thus have an incentive to bias their portfolios towards home equity. Using US household data from the Survey of Income...

Abstract: When it comes to economic reforms in developing countries, many economists agree on broad objectives (such as fostering outward orientation). Broad objectives, however, can be pursued in many di¤erent ways, and policy experimentation is often indispensable for learning which...

Abstract: We study the effects of improvements in eBay’s rating mechanism on seller exit and continuing sellers’ behavior. Following a large sample of sellers over time, we exploit the fact that the rating mechanism was changed to reduce strategic bias in buyer rating. That improvement did...

A sophisticated player is an individual who takes the action of the opponents, in a strategic situation, as determined by decision of rational opponents, and acts accordingly. A sophisticated agent is rational in the choice of his action, but ignores the fact that he is part of a strategic...

Behavioral economics provides several motivations for the common observation that agents appear somewhat unwilling to deviate from recent choices.More recent choices can be more salient than other choices, or more readily available in the agent's mind.Alternatively, agents may have formed...

This paper considers the financing of a research project under uncertainty about the time of completion and the probability of eventual success.The uncertainty about future success gradually diminishes with the arrival of additional funding.The entrepreneur controls the funds and can divert...