It is well known that a one-dimensional discrete-time model may yield endogenous fluctuations while this is impossible in a one-dimensional continuous-time model. Invernizzi and Medio (1991) recast this time-modeling issue into an aggregation issue. They have proposed a "random-lags approach" as...

Sannikov (2007) investigates properties of perfect public equilibria in continuous time repeated games. This note points out that the proof of the main theorem (Theorem 2) needs some corrections. I show that the main theorem holds as it is with suitable modifications of Lemmata 5 and 6.

Few textbooks in mathematical economics cover optimal timing problems. Those which cover them do it scantly or in a rather clumsy way, making it hard for students to understand and apply the concept of optimal time in new contexts. Discussing the plentiful illustrations of optimal timing...

We observe that countries where belief in the "American dream" (i.e., effort pays) prevails also set harsher punishment for criminals. We know from previous work that beliefs are also correlated with several features of the economic system (taxation, social insurance, etc). Our objective is to...

We estimate a finite mixture model in which countries are sorted into groups based on the similarity of the conditional distributions of their growth rates. We strongly reject the hypothesis that all countries follow a common growth process in favor of a model in which there are two classes of...

The paper explores the role social network capital might play in facilitating poor agents’ escape from poverty traps. We model endogenous network formation among households heterogeneously endowed with both traditional and social network capital who make investment and technology choices over...

In this paper we generalize the heterogeneous risk adverse agents model of diffusion of new products in a multi-firm, heterogeneous and interacting agents environment. We use a model of choice under uncertainty based on Bayesian theory. We discuss the possibility of product failures, the set of...

Maskin and Riley (2003) and Lebrun (2006) prove that the Bayes-Nash equilibrium of �rst-price auctions is unique. This uniqueness requires the assumption that a buyer never bids above his value. We demonstrate that, in asymmetric �rst-price auctions (with or without a minimum bid), the...

Any legislative framework is likely to generate different institutions or norms of behavior which the legislator occasionally could have never foreseen. I suggested a general pattern, on which inefficient, if stable, norms or institutions called institutional traps would form.

Two myths have harmed many economies throughout the world. One is the theory of absolute advantage of central planning over the market mechanism, and the other is the belief that efficient markets develop spontaneously and quickly enough if appropriate economic legislation is established....