This paper analyzes a unique dataset, which contains results of a large-scale experiment in the credit card market. Two puzzling phenomena are observed that suggest time inconsistency in consumer behavior: First, consumers prefer an introductory offer which has a lower interest rate with a...

In the economic literature on bankruptcy, the standard methodology is to model the individual's bankruptcy decision as a binary choice between quot;bankruptcyquot; and quot;no bankruptcy.quot; We define an additional choice - non-repayment without seeking the formal protection of the bankruptcy...

This paper studies the participation and performance of sophisticated versus unsophisticated auction participants in an environment with numerous bidders, uncertainty, and asymmetric information. We examine multi-unit, pay-as-bid, currency auctions conducted by the Central Bank of Venezuela. We...

We perform laboratory experiments comparing auctions with endogenous budget constraints. A principal imposes a budget limit on a bidder (an agent) in response to a principal-agent problem. In contrast to the existing literature where budget constraints are exogenous, this theory predicts that...

This paper provides a new defense for emphasizing efficient auction design rather than optimal auction design. Because in auction markets followed by perfect resale, it is optimal to be efficient.In an optimal auction, a revenue-optimizing seller often awards goods inefficiently, either by...