and customers are prone to fraudulent behavior of sellers and resulting market inefficiencies. We present the first model … framework. We test the model’s predictions in a laboratory experiment. Both in theory and in the experiment diagnostic …

Mental models help people navigate complex environments. This paper studies how people deal with model uncertainty. In … determines its true value. Using a between-subjects design, we vary the degree of model complexity. Results show that in high …-complexity conditions people fully neglect model uncertainty in their actions. However, their beliefs continue to reflect model uncertainty …

On the eve of its 60th anniversary, the gravity model of trade is a "celebrity", due to its intuitive appeal, solid … a-theoretical application to an estimating computable general equilibrium (E-CGE) model, which can be nested in more … complex frameworks. Along the way, I address some misconceptions about the gravity model, summarize the current best practices …

parsimonious mixture modeling that allows for fat-tailed errors compared to the normal benchmark case. Applying robust model …This paper investigates the robustness of determinants of economic growth in the presence of model uncertainty …, parameter heterogeneity and outliers. The robust model averaging approach introduced in the paper uses a flexible and …

Employing an endogenous growth model with human capital, this paper explores how productivity shocks in the goods and … model, we introduce a vector error correction model (VECM) of the measurement errors and estimate the model's posterior … the endogenous growth model or the standard real business cycle model better explains the observed variation in these …

distancing, incentives to comply, vaccination and the emergence of new variants. Evidence based on panel data modeling indicates …

Using a two-sector endogenous growth model, this paper explores how productivity shocks in the goods and human capital … findings, we also assess whether the human capital model or the standard real business cycle (RBC) model better explains the … across all variables and forecast horizons, the two-sector model provides a far better fit to the data. Some other key …

Robust decision making implies welfare costs or robustness premia when the approximating model is the true data … general equilibrium model with human capital and introduce an additional form of precautionary behavior. The latter arises … from the robust decision maker's ability to reduce the effects of model misspecification through allocating time and …

We model EU countries' bank ratings using financial variables and allowing for intercept and slope heterogeneity. Our …

The Generalized Calvo and the Generalized Taylor model of price and wage-setting are, unlike the standard Calvo and … monetary policy transmission by embedding these calibrated models in a standard DSGE model. The Generalized Taylor model is …