We identify total factor productivity (TFP) news shocks using standard VAR methodology and document a new stylized fact: in response to news about future increases in TFP, inventories rise and comove positively with other major macroeconomic aggregates. We show that the standard theoretical...

This paper presents an extensive theoretical and empirical analysis of the choice of schedule buffers by airlines. With airline delays a continuing problem around the world, such an under-taking is valuable, and its lessons extend to other passenger transportation sectors. One useful lesson from...

We develop a behavioral macroeconomic model in which agents use simple but biased rules to forecast future output and inflation. This model generates endogenous waves of optimism and pessimism (Animal Spirits") that are generated by the correlation of biased beliefs. We contrast the dynamics of...

I distinguish two types of macroeconomic models. The first type are top-down models in which some or all agents are capable of understanding the whole picture and use this superior information to determine their optimal plans. The second type are bottom-up models in which all agents experience...

Firms adjust to differences in market size and demand uncertainty by changing the frequency and size of their export shipments. In our inventory model, transportation costs and optimal shipment frequency are determined on the basis of demand as well as inventory and per shipments costs. Using a...

We study the role of heuristic versus deliberative processing in intertemporal choice. Using studies in the Democratic Republic of Congo and an online labor market, we show that waiting periods –designed to prompt deliberation by temporally separating news about choice sets from choices...

We use a unique hand collected data set of 6 258 auctions from the online football manager game Hattrick to study micro-patterns of reserve price formation. We find that chosen reserve prices exhibit both, very sophisticated and irrational" behavior by the sellers. Reserve prices pick up the...