We analyse the implications of multiple Nash equilibria in consumption patterns. Multiple equilibrium theory has been extensively used in macroeconomics to explain the convergence of the system to a low inefficient equilibrium. Its microfoundations appear very abstract and stylised. It has been...

We present a model of optimal contracting between a purchaser and a provider of health services when quality has two dimensions. We assume that one dimension of quality is contractible (dimension 1) and one dimension is not contractible (dimension 2). We show that the optimal incentive scheme...

Departing from the welfarist tradition, recent theories of justice focus on individual opportunities as the appropriate standard for distributive judgments. Justice is seen as requiring equality of opportunity, instead of outcomes, among the individuals. To explore how this philosophical...

Via the leading unit root case, the problem of testing on a lagged dependent variable is characterized by a nuisance parameter which is present only under the alternative (see Andrews and Ploberger (1994)). This has proven a barrier to the construction of optimal tests. Moreover, in their...