We develop a model where institutions form connections through swaps of projects in order to diversify their individual risk. These connections lead to two different network structures. In a clustered network groups of financial institutions hold identical portfolios and default together. In an...

The financial crisis has brought to light diffuse opportunistic behaviour and some serious frauds.Because of this trust towards banks, bankers, brokers and the stock market has collapsed to unprecedented levels and there are so far no signs of recovery. This paper uses survey-based information...

We use survey data to study American households' propensity to default when the value of their mortgage exceeds the value of their house even if they can afford to pay their mortgage (strategic default). The cost of defaulting strategically increases in wealth, but at a decreasing rate. It is...

Technological knowledge and organizational knowledge are distinguished in order to define economic competence formally. This definition is made operational in the simplest possible linear model of production. Productivity gains are shown to originate from changes in organizational capabilities...

This paper considers the dynamic evolution of algorithmic (recursive) learning rules in a normal form game. It is shown that the system - the population frequencies - is globally stable for any arbitrary N-player normal form game, if the evolutionary process is algorithmic and the "birth...

I analyze the reallocation of labor and human capital from the state sector to the nonstate sector and nonemployment in Russia. I use a nationally representative household data set, the Russian Longitudinal Monitoring Survey, to study sectoral mobility in two periods of transition using...

The effects of competition on growth are analyzed in the recent literature by comparing economies with the same market structure but different degrees of substitutability. In this note, we show that in a general equilibrium model with monopolistic competition à la Dixit-Stiglitz the effect of...

Using data from a large, U.S. federal job training program, we investigate whether enrolment incentives that exogenously vary the ‘shadow prices’ for serving different demographic subgroups of clients influence case workers’ intake decisions. We show that case workers enroll more clients...

While economists usually resort to redistribution between individuals of different skill levels and majority voting when explaining migration policies, the present political economy model of preferential trade and migration agreements suggests an alternative approach based on the following two...