This paper decomposes price into its 2 major constituents, namely markup (Mkp) and marginal cost (MC) with which a Markov-switching VAR with fixed transition probabilities is estimated. Since the proposed pair of variables has not been extensively analysed, a theoretical model that derives...

Linear programming is an important method for computing solutions to private information problems. The method is applicable for arbitrary specifications of the preferences and technology. Unfortunately, as the cardinality of underlying sets increases the programs quickly become too large to...

I study the properties of optimal long-term contracts in an environment in which the agent.s type evolves stochastically over time. The model stylizes a buyer-seller relationship but the results apply quite naturally to many contractual situations including regulation and optimal...