This paper presents a model that can account for the gender specialization of skill acquisition in the presence of competitive matching. In particular we show that when the comparative advantage in nonmarket domestic activities belongs to women, an incentive arises for them to intentionally...

I study a model of replacement problem with liquidity constraint, where the land is used as a collateral as well as a factor of production. The collateral value of the land restricts the available funds for the firm, which works as a capacity constraint of firms. Due to this constraint, the...

In this paper, we model a dynamic general equilibrium model of a small open developing economy. We model labor markets as including both formal and informal urban employment as well as rural employment. We find that modelling dual labor markets helps explain why output in developing economies...

In this paper, we model a dynamic general equilibrium model of a small open developing economy. We model labor markets as including both formal and informal urban employment as well as rural employment. We find that modelling dual labor markets helps explain why output in developing economies...

While political correctness is a dominant norm in many public situations, we also observe behaviors that are apparently ''politically incorrect,'' often from professionals and experts. This paper examines the flip side of political correctness as analyzed in Morris (2001) to shed some light on...

In this paper we analyze a cheap talk model with a partially informed receiver. In clear contrast to the previous literature, we find that there is a case where the receiver's prior knowledge enhances the amount of information conveyed via cheap talk. The point of departure is our explicit focus...

Auctions are a popular and prevalent form of trading mechanism, despite the restriction that the seller cannot price-discriminate among potential buyers. To understand why this is the case, we consider an auction-like environment in which a seller with an indivisible object negotiates with two...

It is often argued, though mostly informally, that outward foreign direct investment (FDI) is a synonym for the export of employment and thus detrimental to the home economy. To see whether and under what conditions this intuition indeed holds true, we construct a model of unionized duopoly and...

We consider a gtenure-clock problemh in which a principal may set a deadline by which she needs to evaluate an agent's ability and decides whether to promote him or not. We embed this problem in a continuous-time model with both hidden action and hidden information, where the principal must...