We discuss a class of markets for durable goods where efficiency (or approximate efficiency) is obtained despite the presence of information asymmetries. In the model, the number of times a good has changed hands (the vintage of the good) is an accurate signal of its quality, each consumer...

We study the policy choices of an incumbent politician when voters imperfectly observe aggregate spending and the incumbent's ability. We show that total spending is decreasing in the transparency of spending, but increasing in the transparency of the incumbent's ability. The model further...

This is an invited chapter for the forthcoming Volume 4 of the Handbook of Industrial Organization. We focus on markets with frictions, such as transaction costs, asymmetric information, search and matching frictions. We discuss how such frictions affect allocations, favor the emergence of...