In this article, we review the functioning of private insurance against banking crises and identify its potential. The essential idea is that banks are recapitalized by private investors when negative events would otherwise cause a write-down of capital—or even bank insolvency. There are two...

This paper provides a macroeconomic perspective for government interventions in banking crises. Such crises occur when a large number of banks fall to meet capital requirements or are insolvent. Using a macroeconomic model with financial intermediation, our analysis suggests that strict...

We analyze the effect of handicaps on turnout. A handicap is a difference in the vote tally between alternatives that strategic voters take as predetermined when they decide whether to turn out for voting. Handicaps are implicit in many existing democratic procedures. Within a costly voting...

We present a variant of a general equilibrium model with group formation to study how changes of non-consumptive benefits from group formation impact on the well-being of group members. We identify a human relations paradox: Positive externalities increase, but none of the group members gains in...