This discussion paper led to a publication in 'Macroeconomic Dynamics' (2013). Vol. 17(8), pp. 1574-1604.<P> The recent macroeconomic literature stresses the importance of managing heterogeneous expectations in the formulation of monetary policy. We use a stylized macro model of Howitt (1992) to...</p>

We develop a theoretical framework for studying the effects of interaction on the quaJity of decision-making by monetary policy committees. We show that interaction, i.e. increasing one's expertise through an exchange of views, is most likely not to result in interdependent voting...

This paper gives an overview and evaluates the literature on Microfoundations.<P> See also 'Microfoundations: A Critical Inquiry', Routledge, London, 1993 Reviewed in Economic Journal, 1994; De Economist, 1995; Journal of Economic Methodology, 1996; Economics and Philosophy, 1996).

In this paper we introduce flexibility as an economic concept and apply it to the firm’ssecurity issuance decision and capital structure choice. Flexibility is the ability to makedecisions that one thinks are best even when others disagree. The firm’s management valuesflexibility because it...

This discussion paper led to a publication in the 'Journal of Law, Economics & Organization', 2004, 20, 353-378.<P> This paper is concerned with the role of committees in collective decision-makingprocesses in a world where agents must be motivated to collect information. Committees improvethe...</p>

We develop an economic theory of “flexibility”, which we interpret as the discretion orability to make a decision that others disagree with. We show that flexibility is essentiallyan option for the decisionmaker, and can be valued as such. The value of the flexibilityoption is decreasing in...

We analyse a model of equilibrium directed search in a large labour market. Each worker, observing the wages posted at all vacancies, makes a fixed, finite number of applications, a. We allow for the possibility of ex post competition should more than one vacancy want to hire the same worker....

In this paper we propose the use of <I>preferred outcome</I> distributions as a new method to elicit individuals' value and probability weighting functions in decisions under risk. Extant approaches for the elicitation of these two key ingredients of individuals' risk attitude typically rely on a long,...</i>

We study mergers in a market where N firms sell a homogeneous good and consumers search sequentially to discover prices. The main motivation for such an analysis is that mergers generally affect market prices and thereby, in a search environment, the search behavior of consumers. Endogenous...

This paper studies the incentives to merge in a Bertrand competition model where firms sell differentiatedproducts and consumers search for satisfactory deals. In the pre-merger symmetricequilibrium, the probability that a firm is the next one to be visited by a consumer is equal acrossfirms not...