This paper argues that moderate unemployment insurance not only reduces the uncertainty faced by risk-averse workers but also improves efficiency and raises output. We develop a model in which the decentralized equilibrium is inefficient without unemployment insurance, because the labor market...

I develop a simple new model of strategic trade with endogenous timing, generalizaing Glosten and Milgrom (1985) : A competitive market maker faces n risk neutral traders with unit demands or suppliers. It is private information whether any given trader is either informed, with a heterogeneous...

This paper examines the agency conflict between mutual fund investors and mutual fund companies. Investors would like the fund company to use its judgment to maximize risk-adjusted fund returns. A fund company, however, in its desire to maximize its value as a concern has an incentive to take...

We propose a model in which economic relations and institutions in advanced and less developed economies differ as these societies have access to different amounts of information. This lack of information makes it hard to give the right incentiv es to managers and entrepreneurs. We argue that...

This paper develops necessary and sufficient conditions for monotone comparative statics predictions in several general classes of stochastic optimization problems. There are two main results, where the first pertains to single crossing properties (of marginal returns, incremental returns, and...