I study a search economy in which intermediaries are the driving force co-ordinating the economy on the use of a unique, common medium of exchange for transactions. If search frictions delay trade, intermediaries offering immediate exchange opportunities can make arbitrage gains from a price...

The theory of subjective expected utility (SEU) has been extended in many recent works, allowing ambiguity to matter for choice. However, a fully satisfactory and general notion of ambiguity aversion, analogous to risk aversion for SEU, is still missing. Using a new preference model which...

We have estimated a 4-step sequential probit model with and without sample separation information to characterize SSA's disability determination process. Under the program provisions, different criteria dictate the outcomes at different steps o f the process. We used data on health, activity...

Exchange rates typically exhibit time-varying patterns in both means and variances. The histograms of such series indicate heavy tails. In this paper we construct models which enable a decision-maker to analyze the implications of such time series patterns for currency risk management. Our...

The implementation of the 1950 Swedish comprehensive school reform was preceded by a unique social experiment. During this experiment between 1949 and 1962 the new school system was implemented in stages. This allows us to study the same cohort of individuals going through two different school...

If contracting within the firm is incomplete, managers will expend resources on trying to appropriate a share of the surplus that is generated. We show that outside ownership may alleviate the deadweight losses associated with such costly distributional conflict, even if all it does is add...

This paper shows that labor market institutions are important for the formation of new entreprises and market entry. The effects of different labor market institutions on wage determination, entrepreneurship and firm size are analysed both analytically and illustrated numerically. Models where...

Essential characteristics of corruption are (1) a reciprocity relationship between briber and public official, (2) negative external effects to others, and (3) high penalties for the parties involved in case of discovery. We separate the behavioural influences of these factors in a laboratory...

This paper provides an investigation of the post-entry selection among newly founded firms either via voluntary liquidation or via forced bankruptcy liquidation for the period since the unification of East and West Germany in 1990. The exit decision of newly founded firms is discussed in the...

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