We employ a stochastic dynamic programming approach to study decision making by an individual wishing to have an arranged marriage. First, we show that this individual never opts out of a voluntarily agreed upon marriage. Second, we demonstrate that our marrying individual uses a reservation...

We first construct a theoretical model of tax evasion in a stylized developing country in which all taxpayers have either high or low income. The key problem is that the high income taxpayers may under report their income. An individual income tax return can only be verified with an audit that...

We analyze the activities of an entrepreneur who must, at each date, decide whether to search for a new production technique or to produce output with an extant technique. Our analysis leads to four results. First, we show that if our entrepreneur rejects a particular production technique at a...

We analyze the impact of preference matching and income on the distribution of the population in an aggregate economy consisting of an urban and an adjacent rural region. It costs more (less) to live in the urban (rural) region. Individuals choose freely to live either in the urban or in the...

We study pollution cleanup in the Ganges in Varanasi, India. Voters elect politicians and elected politicians decide how much pollution to clean up. Between the two time periods, there is an election. Politicians are sincere or insincere. The marginal cost of public funds ζ measures how...

We study the short-run impacts of labor income taxation in an aggregate economy of N2 regions. The distinct regions demand workers. Each region is endowed with one unit of immobile capital. The aggregate economy also has one unit of labor that is mobile across the regions. All regions produce a...