In recent literature, it has been suggested that consumers need have no knowledge of product quality as a number of quality indicators (or signals) may be used as substitutes. Very little attention has been paid to the empirical verification of these studies. The present paper is devoted to the...

It is shown that a nominal rigidity may work as a natural mechanism for rational expectations endogenous fluctuations. By a nominal rigidity is meant that some nominal price, here the nominal wage rate, does not adjust within each short period to equate supply and demand (of labor), but adjusts...

We investigate the geometry of finite datasets defined by equilibrium prices, income distributions, and total resources. We show that the equilibrium condition imposes no restrictions if total resources are collinear, a property that is robust to small perturbations. We also show that the set of...

A decision-maker exhibits preference for flexibility if he always prefers any set of alternatives to its subsets, even when two of them contain the same best element. Desire for flexibility can be explained as the consequence of the agent’s uncertainty along a two-stage process, where he must...

A nationwide household survey for Mozambique is used to estimate a large censored food demand system with 12 food groups for the sample of urban households. Using the translog indirect utility approach, the censored nature of the data is addressed by estimating a system of Tobit equations with a...

This paper provides a unifying framework for the modeling of various types of credit risks such as contagion effects. We argue that Markov chains can efficiently be used to tackle these problems. However, our approach is not limited to pricing problems with contagion. Other applications include...

We propose novel misspecification tests of semiparametric and fully parametric univariate diffusion models based on the estimators developed in Kristensen (Journal of Econometrics, 2010). We first demonstrate that given a preliminary estimator of either the drift or the diffusion term in a...

The paper studies in a simple, Downsian model of political competition how the private provision of public goods is affected when it is embedded in a system of democracy and redistributive taxation. Results show that the positive effect of inequality on public goods production, which Olson...

We use data collected by the Cambridge Group to investigate and explain differences in fertility by socio-economic group in pre-industrial England. We find, in line with results presented by Greg Clark, that wealthier groups did indeed have higher fertility until the 1700s. We demonstrate that...

In a recent paper, Thomson and Yeh [Operators for the adjudication of conflicting claims, Journal of Economic Theory 143 (2008) 177-198] introduced the concept of operators on the space of rules for the problem of adjudicating conflicting claims. They focussed on three operators in order to...