A "folk theorem" originating, among others, in the work of Stiglitz maintains that competitive equilibria area always or "generically" inefficient (unless contracts directly specify consumption levels as in Prescott and Townsend, thus bypassing trading in anonymous markets). This paper...

This paper presents a multi-sector model of tradable emission permits, which includes oligopolistic and perfectly competitive industries. The firms in oligopolistic industries are assumed to exercise market power in the tradable permit market as well as in the product market. Specifically, we...

Information in digital form transforms from a rivalrous to a non-rivalrous good, with profoundly different and counter-intuitive economic properties. This essay reviews five key features of digital goods: renewability, universality, magnetism, friction-free transfer, and vulnerability....

Middlemen contribute greatly to economic activities (Sharat Ganapati, 2018, William J. Regan, 1949, Tamara Todorova and Ivan Iliev, 1999), so Johri and Leach (2002) tried to build a general equilibrium model for them. This paper reproduces their general equilibrium, and then shows how they killed it

This paper presents an infinite-horizon, discounted dynamic programming model of the endogenous opportunity costs of an agent's effort that is allocated among an endogenous number of principals. An agent allocates effort between evaluating new principals and attending to current principals....

This paper studies a closed economy with a continuum of agents and moral hazard. Economic agents in the economy operate a stochastic production technology with capital and labor inputs in which the latter is private information. I characterize efficient allocations of capital, labor, and...

The literature on Walrasian markets in large economies with adverse selection has used various equilibrium refinements, but has obtained no general incentive efficiency of equilibrium, namely when cross-subsidies are needed for efficiency. We show that the same refined equilibria may also be...

This paper studies a closed economy with a continuum of agents and moral hazard. Economic agents in the economy operate a stochastic production technology with capital and labor inputs in which the latter is private information. I characterize efficient allocations of capital, labor, and...