The narrow applicability of Blackwell's result that "more information" is desirable, lies in the fact in economic models once a signal is observed by all economic agents their opportunity sets may vary. We show that Blackwell's theorem does not hold when the feasible set of actions is...

Tax planning is an area of growing interest and this paper is an attempt to contribute to the small formal literature on this topic. The paper analyzes the case of tax planning that manipulates the tax system to impose lower effective tax rates on gains than on losses, and proves that such tax...

We present a perfect Nash equilibrium in which the creator of a work, motivated by economic considerations, selectively enforces her own copyright. In fact, the creator may not only permit, but may strategically promote infringement of the copyright, thereby participating indirectly in predatory...

This research applies data from a unique natural policy experiment to assess the effects of heuristics on housing decisions and public policy outcomes. The data derive from programs designed to privatize public housing in Israel. The programs provided tenants with a call (real) option to...

The signaling model of Spence (1973a) and the screening model of Rothchild-Stiglitz (1976) have been separately used to explain economic phenomena when there is asymmetric information. In the real world, however, situations of asymmetric information often simultaneously involve signaling and...

Consistent with existing literature, we first show that when borrowers' default probability on the mortgage loan is unobservable to the lender, the latter can screen borrowers by their combined choice of loan-to-value (LTV) ratio and interest rate. We further demonstrate that when borrowers also...

In contrast to the common tenure choice literature, we examine behavioral, as opposed to rational, factors affecting the individual's choice between homeownership and tenancy. We survey potential homebuyers in order to trace their tenure choice considerations. We find that while ordinary...

To the lender, the latter can screen borrowers by their combined choice of loan-to-value (LTV) ratio and interest rate. It further demonstrates that when borrowers signal their default risk by acquiring a credit score, then a combined separating signaling and screening equilibrium is attained....

When there is asymmetric information regarding the quality of a traded durable asset, the informed seller might signal asset quality to prospective uninformed buyers by investing in improvements and maintenance. In contrast to Spence (1973), however, this signal may be productive. We derive...