The prudent peasant mitigated the risk of crop failure by scattering his arable land Throughout his village, McCloskey argued, because formal insurance institutions did not exist. A Village of rational peasants facing idiosyncratic risks, Kimball replied, should have helped each other through...

We consider a firm that is subject to employment protection laws that limit the firm's ability to fire labor. In particular, we suppose that though a firm which shuts down can fire all its workers, it may fire no fewer. Compared to a firm that is subject to no employment protection, a firm...

This paper estimates the probability distribution of budgets, revenues, returns and profits to G-, PG-, PG13-, and R-rated movies. The distributions are non-Gaussian and show a self-similar stable Paretian form with non-finite variance and non-stationary mean.

For a perfectly competitive firm with a constant returns to scale techenology, a greater price uncertainty has been shown to increase investment even in the presence of irrecersible investment. We show, however, that the option value generated by a one-time fixed cost can cause increasibg...