We study human trafficking in a marriage market model of prostitution. When trafficking is based on coercion, trafficking victims constitute a non-zero share of supply in any unregulated prostitution market. We ask if regulation can eradicate trafficking and restore the outcome that would arise...

Financing from family and friends is the predominant type of informal finance. This paper proposes a theory that reconciles two seemingly paradoxical traits of this form of finance, namely, it is often provided at negative prices but nevertheless eschewed by borrowers. A central prediction is...

Certain markets are illicit because part of the supply is coerced, but little is known about the optimal regulation of such markets. We model a prostitution market with voluntary and coerced prostitutes and ask what regulation can restore the benchmark outcome that would arise under...

The majority of informal finance, in developed and developing countries, is provided by family and friends. Yet existing models of informal finance better fit “informal moneylenders” insomuch as they fail to match two salient characteristics of family finance: family investors often accept...