We consider an economic model of child development with multiple stages. Due to incomplete information, parents are not able to tailor their investments to their child's type when the child is young. We show that incomplete information weakens the importance of early investments in children when...

We show that aversion to risk and ambiguity leads to information inertia when investors process public news about assets. Optimal portfolios do not always depend on news that is worse than expected; hence, the equilibrium stock price does not reflect this bad news. This informational inefficiency...

We consider an economic model of child development with multiple stages. Due to incomplete information, parents are not able to tailor their investments to their child’s type when the child is young. We show that incomplete information weakens the importance of early investments in children...

Consumers in many markets face a growing variety of products grouped under different umbrella brands, and can access vast amounts of information about these products. This may result in increasing product-level competition between firms. However, some observers argue that the increase in the...

I propose an intertemporal precautionary-saving model in which the agent's labor income is subject to both permanent and transitory shocks. However, he only observes his total income, not individual components. I show that partial observability of individual components of income gives rise to...

Entrepreneurs have always been regarded as talented individuals who can bear the risk of running a business. They can reap a huge profit in return for their hard work. In mainland China, most housing entrepreneurs do not provide housing with fittings. There are no floor or wall fittings, kitchen...

This paper introduces incomplete information into the standard cultural transmission framework (Bisin and Verdier, 2001). We assume that through the interaction with their offspring, parents receive feedback about the outcome of the socialization process, but are not able to disentangle the...

Consider an investment problem with strategic complementarities and incomplete information about returns. This paper shows that investors aggregate their private information in equilibrium by trading a token and observing its market price over multiple rounds before making the investment...

We study a strategic market game with finitely many traders, infinite horizon and real assets. To this standard framework (see, e.g. Giraud and Weyers, 2004) we add two key ingredients: First, default is allowed at equilibrium by means of some collateral requirement for financial assets; second,...

We analyze a model of price competition ά la Bertrand in a network environment. Firms only have a limited information on the structure of network: they know the number of potential customers they can attract and the degree distribution of customers. This incomplete information framework...