In the United States natural gas pipelines lease their transport capacity to shippers via contracts, which shippers manage as real options on differences between natural gas prices at different geographical locations. In practice it is common to value these real options using spread option...

Computing semiparametric bounds for option prices is a widely studied pricing technique. In contrast to parametric pricing techniques, such as Monte-Carlo simulations, semiparametric pricing techniques do not require strong assumptions about the underlying asset price distribution. We extend...

Many universities in the US o¤er on-campus housing opportunities to incoming as well as already enrolled students. Recent research has theoretically as well as experimentally shown that the most common student assignment mechanism used in the US is subject to serious efficiency losses. In this...

We examine the evolving structure of the U.S. hospital industry since 1970, focusing on how ownership form influences entry and exit behavior. We develop theoretical predictions based on the model of Lakdawalla and Philipson, in which for-profit and not-for-profit hospitals differ regarding...

During the past several years, a striking body of literature has appeared in which it is argued that general price level determination is essentially a fiscal, rather than monetary, phenomenon. The most prominent papers have been those of Woodford (1994, 1995, 2001), Sims (1994, 1997), Leeper...

We quantify the effect of financial leverage on stock return volatility in a dynamic general equilibrium economy with debt and equity claims. The effect of financial leverage is studied both at a market and a firm level where the firm is exposed to both idiosyncratic and market risk. In a...

Markets for illicit drugs present an interesting case study for economics, combining non-standard characteristics such as addiction and product illegality. One response has been to argue the generality of economic principles by suggesting that they apply even in the extreme case of markets for...

This paper compares the P-bar model of price adjustment with the currently dominant Calvo specification. Theoretically, the P-bar model is more attractive as it depends on adjustment costs for physical quantities rather than nominal prices, while incorporating a one-period information lag....

his paper develops a theoretical model to understand the contractual role of accounting conservatism in debt contracts. The optimal debt contract includes an accounting based covenant that gives the creditor the right to liquidate when accounting information reveals unfavorable news about the...

We adapt the Expectation-Maximization (EM) algorithm to incorporate unobserved hetero- geneity into conditional choice probability (CCP) estimators of dynamic discrete choice problems. The unobserved heterogeneity can be time-invariant, fully transitory, or follow a Markov chain. By exploiting...