We develop a macroeconomic framework in which firms are large and have market power with respect to both products and labor. Each firm maximizes a share-weighted average of shareholder utilities, which makes the equilibrium independent of price normalization. In a one-sector economy, if returns...

Lotto demand modeling typically focuses on a single game and evaluates whether estimated “effective price” (expected loss from buying one ticket) elasticity is consistent with net revenue maximization. However, a portfolio of several different lottery games is now usually offered to players...

Deferred income taxation is widely used to encourage investment or saving. However, most income tax bases are more or less distortive (non-neutral). Using lab experiments, we find that the deferral of a distortive income taxation can result in substantial overproduction and less willingness to...

Using longitudinal data from PSID, we show the positive relation between labor income and the equity share of financial wealth is stronger for those who have a higher persistence in shocks to permanent labor income. The results support the hypothesis that the cross sectional variation in...

This paper extends the project initiated in and studies a lifecycle portfolio choice problem with borrowing constraints and finite retirement time in which an agent receives labor income that adjusts to financial market shocks in a path dependent way. The novelty here, with respect to, is the...

Employee share ownership is growing increasingly important. This paper studies employee share ownership in an economy with one monopoly union for each firm. We modify an implicit contract model by adding dividend income to the usual wage income. Union members differ in exogenous stock endowments...

We present a robust version of the life-cycle optimal portfolio choice problem in the presence of labor income, as introduced in Biffis, Gozzi and Prosdocimi and Dybvig and Liu. In particular, in the influence of past wages on the future ones is modelled linearly in the evolution equation of...