This paper finds an optimal mechanism for selling an indivisible good to consumers who may be budget-constrained. Unlike the case where buyers are not budget constrained, a single posted price is not typically optimal. An optimal mechanism generally consists of a continuum of lotteries indexed...

In his work on signaling, Spence proposed a dynamic model of a market in which a buyer revises prices in light of experience and in which sellers, with private information about their type, choose utility-maximizing signals given these prices. We follows Spence's suggestion of introducing...

We examine an important class of decision problem under uncertainty that entails the standarrd portfolio problem and the demand for coinsurance. The agent faces a controllable risk -his demand for a risky asset for example- and a background risk. We determine how a change in the distribution in...

This paper studies the incentives of short-lived agents to acquire costly private information in the presence of public signals arising from market interaction. It characterizes the social learning process, that is the revelation of information by public signals, and the information...

We study the interaction between leverage, employment structure and compensation policies within firms.

In this paper we show how a shift in a return distribution affects the composition of an optimal portfolio in the case of one riskless asset and two risky assets. We obtain that, in general, such a shift modifies the composition of themutual fund. We also show that the separating conditions...