Through extending a standard Grossman and Stiglitz (1980) noisy rational expectations economy by a heterogeneous signal structure with signal-specific differences in uncertainty, we show that price momentum as well as reversal are not intrinsically at odds with rational behavior. Differences in...

Generalizing the idea that price momentum can be explained by different levels of uncertainty inherent in the information structure, we implement signal-specific differences in uncertainty in a Kyle type model of strategic trading. We derive the equilibrium in a single-auction setting as well as...

What happens to the distribution of public resources when undocumented migrants obtain legal status through nation-wide amnesty? In this paper, we exploit variation in legal status from the 1986 Immigration Reform and Control Act (IRCA) to answer this question and find that state governors, of...