This note describes a simple procedure for solving the risky steady state in medium-scale macroeconomic models. This is the “point where agents choose to stay at a given date if they expect future risk and if the realization of shocks is 0 at this date” [Coeurdacier, N., Rey, H., Winant, P.,...

Laitinen (1980) derives an input allocation model for a multiproduct firm that first maximizes revenue and second maximizes profit. While theoretically elegant, the model has never been formulated empirically because of the complexity of the model’s price-deflated terms. This paper derives the...

Using grocery store data we study the relationship between dispersion and the business cycle. Our findings reveal that overall there is no robust and significant relationship; however, these mask important heterogeneity in the cyclicality of dispersion at the category level.

Random choices of prices and product characteristics can be used by a contestable monopolist to deter entry and fully extract the monopoly rent. We develop this idea in a model of Bertrand price competition. In equilibrium, one firm enters the market and makes choices that are unpredictable to...

Existing hedonic methods cannot be easily adapted to estimate willingness to pay for product characteristics when willingness to pay depends on a very large basket of goods. We show how to marry these methods with revealed preference arguments to estimate bounds on willingness to pay using data...

Why do some participants in online auctions place their bids right before the time of closing? Using e-Bay data, we propose count-data models to look at both the presence of the late-bidding phenomenon and its intensity. Our results reveal significant differences between extremely late-bidders...

A monopoly that sells to brand-name loyal customers and to price-sensitive customers must decide whether to carry both name-brand and private-label products and how much to charge. The monopoly may charge either more or less for the brand name if it carries a private label, and the price...

We show that a non-Bayesian learning procedure leads to very permissive implementation results concerning the efficient allocation of resources in a dynamic environment where impatient, privately informed agents arrive over time, and where the designer gradually learns about the distribution of...

I investigate an asymmetric duopoly where a public enterprise must supply the demand it faces, while a private enterprise has no such obligation. I show that such an asymmetric regulation yields the first-best outcome (Walrasian equilibrium).

This paper quantifies the effects of drug monopolies and low per-capita income on pharmaceutical prices in developing economies using the example of the antiretroviral drugs (ARVs) used to treat HIV.