Information is a precious resource when solving decision problemsunder uncertainty. The paper deals with the estimation of the value of informationunder different rationality concepts of the decision maker. The value of informationand the expected value of (un)certain information will be...

The productivity of (human) information processing as an economicactivity is a question that is raising some interest. Using Marschak’s evaluationframework, Radner and Stiglitz have shown that, under certain conditions,the production function of this activity has increasingmarginal returns in...

We analyze the design of legal principles and procedures for court decision-making in civil litigation. The objective is the provision of appropriate incentives for potential tort-feasors to exert care, when evidence about care is imperfect and may bedistorted by the parties. Efficiency is shown...

This paper seeks to disentangle the sources of correlations between high-, mid- and lowcap stock indexes from the German prime standard. In principle, such comovement can arise from direct spillover between the variables or due to common factors. By standard means, these different components are...

This paper is a progress report on understanding the relationship betweenprices and allocations of risks on financial markets versus macroeconomicchoices and allocations. In this paper, I investigate the scope of a modelwith exogenous habit formation – or “catching up with the Joneses”,...

Are ethnic specialization and thus a downward sloping labor demand curve fundamentalfeatures of labor market competition between ethnic groups? In a general equilibrium model,this paper argues that spillover effects in skill acquisition and social distances between ethnicgroups engender...

Using structural VARs, I find that external shocks are an important source of macroeconomic fluctuations in emerging markets. Furthermore, U.S. monetary policy shocks affect quickly and strongly interest rates and the exchange rate in a typical emerging market. The price level and real output in...

We decompose by origin the sources of the variation in real aggregate output and aggregate price level in the Czech Republic, Hungary and Poland. We find that a sizable fraction of the variation is attributable to external shocks, especially so for aggregate price level. We show that euroarea...

In the data, individual prices change frequently and by large amounts. In standardsticky price models, frequent and large price changes imply a fast response of the aggregate price level to nominal shocks. This paper presents a model in which price setting firms optimally decide what to observe,...