This paper studies how punishment for past offenses affects future compliance behavior and isolates deterrence effects mediated by learning. Using administrative data from speed cameras that capture the full driving histories of more than a million cars over several years, we evaluate responses...

This paper studies how litigation and settlement behavior is affected by agents motivated by spiteful preferences under the American and the English fee-shifting rule. We conduct an experiment and find that litigation expenditures and settlement requests are higher for more spiteful...

A pre-condition for employer learning is that signals at labor market entry do not fully reveal graduates’ productivity. I model various distinct sources of signal imperfection—such as noise and multi-dimensional types—and characterize their implications for the private return to skill...

This paper develops an algorithm that enables to solve macroeconomic models with Rotemberg pricing and imperfect common knowledge. Under the concept of imperfect common knowledge, Rotemberg pricing requires the solution algorithm to take prices explicitly into account. The state space includes...

Using a long-panel dataset of Japanese firms that contains firm-level sales forecasts, we provide evidence on firm-level uncertainty and imperfect information over their life cycle. We find that firms make non-negligible and positively correlated forecast errors. However, they make more precise...

We investigate how the pass-through rate of commodity taxes depends on competition in a setting where consumers have imperfect information about prices. We use a theoretical search model that has two key predictions: First, the larger the number of price sensitive consumers, the higher the...

The paper considers a duopoly model in which firms inherited asymmetric market shares and history-based price discrimination is viable. However, firms can identify only a share of their own consumers depending to the degree of information accuracy. We derive the pricing strategies and we analyze...

Insurance for natural hazards - earthquakes, hurricanes, or pandemics - is rarely comprehensively adopted without intense government intervention, and even then it is often only a minority of properties or businesses that are insured. Efforts to close this insurance gap include the introduction...

We experimentally study decentralized one-to-one matching markets with transfers. We vary the information available to participants, complete or incomplete, and the surplus structure, supermodular or submodular. Several insights emerge. First, while markets often culminate in efficient...

Tax legislation, fiscal authorities, and tax courts create tax uncertainty by frequent tax reforms and various different interpretations of the tax law. Moreover, investors generate model-specific tax uncertainty by using simplified models that anticipate the actual tax base incorrectly. I...