We model trading and price formation in a market under the assumption that order arrival and cancellations are Poisson random processes. This model makes testable predictions for the most basic properties of markets, such as the diffusion rate of prices (which is the standard measure of...

This paper assesses the trade-off between acquiring specialized skills targeted for a particular occupation and acquiring a package of skills that diversifies risk across occupations. Individual-level data on college credits across subjects and labor market dynamics reveal that diversification...

This paper studies an environment in which workers accumulate information about employment contacts made while searching on-the-job. Workers use this search capital to improve wages and insure against job destruction. This behaviour generates voluntary and involuntary job-to-job transitions with...

We document and attempt to explain the observation that automobile insurance premiums vary dramatically across local markets. We argue high premiums can be attributed to the large numbers of uninsured motorists in some cities, while at the same time, the uninsured motorists can be attributed to...

In order to explain in a systematic way why certain combinations of market, financial, and legal structures may be intrinsic to certain capabilities to exchange real goods, we introduce criteria for abstracting the qualitative functions of markets. The criteria involve the number of strategic...

If buyers cannot observe product characteristics, they search available sellers to find better matches. In this situation, market go-betweens who 'manage' a variety of products emerge, offering consumers a variety of trading opportunities which reduce the uncertainty of search and improve the...