Targeted advertising can benefit consumers through lower prices for access to websites. Yet, if consumers dislike that websites collect their personal information, their welfare may go down. We study competition for consumers between websites that can show targeted advertisements. We find that...

Distributed Denial of Service (DDoS) attacks are a frequently occurring type of cybercrime, with potentially large costs to the real economy. We propose a simple model of the size and direction of DDoS attacks. The main predictions of the model are that effective botnets are located in...

Despite the centrality of incentives for innovation in models of economic growth, there is little systematic evidence that the value of technologies varies with market size and institutional arrangements. This paper presents micro-evidence indicating the value of patent rights for a given...

Reduced credit supply in the years 2008 and 2009 should have resulted in lower growth in industries that are more dependent on external finance. This effect should have been stronger in countries with a more prominent and/or more leveraged financial system. We focus on the OECD countries and,...

In GRAVITY WITH GRAVITAS: A SOLUTION TO THE BORDER PUZZLE, Anderson and Van Wincoop (2003) estimate what trade between US states and Canadian provinces would have been if the border between Canada and the United States had not existed. They showed that computing the border effect requires...

During the last twenty years the share of researchers in the workforce has been rising in OECD countries. In the same period, the distribution of schooling has become more equal. This paper proposes that the rise in the proportion of researchers is caused by the decline in schooling...

Exchange rate risk will only have a small effect on international transactions as long as this risk is easily tradable. We find evidence indicating that the availability of currency futures can explain the relatively small impact of exchange rate volatility on trade. The impact of exchange rate...

We study optimal timing of regulated investment in a real options setting, in which the regulated monopolist has private information on investment costs. In solving the ensuing agency problem, the regulator trades off investment timing inefficiency against the dead-weight loss arising from high...

In CPB Discussion Paper 209 we study incentives of financial intermediaries to reserve liquidity given that they can rely on the interbank market for their liquidity needs. Intermediaries can partially pledge their assets to each other, but not to the rest of the economy. Therefore liquidity...

We study how the possibility of renegotiation affects optimal bail-out policies for countries under asymmetric information on a country's cost of reforms. To that end, we solve the Bellman equation describing the optimal bail-out mechanism in a multiple-period principal-agent model with adverse...