We evaluate survey-based wage-growth expectations and find that they are neither unbiased nor efficient forecasts. Concerning out-of-sample forecast precision, survey participants generally perform worse than a constant forecast. Caution should accordingly be exercised when relying on these data...

This paper uses a two-step approach to characterize the evolution of US macroeconomic and financial variables during episodes of very high uncertainty. First, we identify episodes of very high uncertainty using a regime-switching model. Second, we assess the behavior of macroeconomic and...

Using a dynamic multivariate system, where variables are aligned in order to reflect data availability at the time when agents form their expectations, we show that survey expectations contain relevant information about business cycle developments in the euro area.

We present an alternative measurement method of investor overconfidence, using unique survey data on stock market predictions of investors. We apply the Parkinson estimate based on extreme bounds around the stock forecast to deduce investor confidence. The results support overconfidence.

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...

This paper studies the discriminatory pricing of an intermediate good and compares two models with a different timing of investments undertaken by the downstream firms, before or after the upstream monopolist sets the input prices. When the more efficient downstream firm is charged a higher...

We present a polynomial time method for identifying the maximal set in excess demand at a given payoff vector. This set can be used in “large” partnership formation problems to identify the minimum element in the set of individually rational payoff vectors at which there is no overdemanded...

We endogenize the trading mechanism selection in a model of directed search with risk averse buyers and show that the unique symmetric equilibrium entails all sellers using fixed price trading. Mechanisms that prescribe the sale price as a function of the realized demand (auctions, bargaining,...

Theoretical explanations for price stickiness used in businesses cycle models are diverse (e.g., information processing delays, rational inattention and fair pricing), with each theory resulting in a different implication for inflation dynamics. Using an autoregressive conditional binomial...

We demonstrate that the Varian (1980) model of sales has a unique Nash equilibrium when firms incur costly advertising to compete for informed consumers. The equilibrium is symmetric. In particular, with costly advertising, the asymmetric equilibria highlighted by Baye et al. (1992) do not arise.