This paper studies effects of two classes of borrowing constraints, collateral- and income-based, on wealth accumulation, portfolio behavior and on precautionary motives. We examine the sensitivity of solutions to tightness of constraints, education level, and preference parameters. The models...

In this paper we consider a simple economy where self interested taxpayers may have incentives to evade taxes and to escape sanctions, by bribing public officials in charge for tax collection. The level of monitoring and the level of corruption are endogenously determined assuming that the price...

This paper addresses the question of whether R&D should be carried out by an independent research unit or be produced in-house by the firm marketing the innovation. We define two organizational structures. In an integrated structure, the firm that markets the innovation also carries out and...

The extent to which consumers are aware of available financial assets depends on the incentives of asset suppliers to spread information about the instruments they issue. We propose a theoretical framework in which the amount of information disseminated and the probability of individuals...

According to the permanent income hypothesis with quadratic preferences, savings should react only to transitory income shocks, but not to permanent shocks. The problem is that income shock components are not separately observable. I show how the combination of income realizations with...

Strotz (1956) first suggested that individuals are more impatient when making short-run tradeoffs than long-run ones. Many experimental studies supports his conjecture. Motivated by recent evidence from the British Department of Work and Pension (2006), this paper applies this behavioral...

This paper uses an industry data set from the European Union, United States and Japan to investigate the degree to which banking regulation and institutional environment affects corporate finance choices. La Porta et al. (1997, 1998) have shown the influence of investor protection on financing...

The theory of intertemporal choice predicts that the cross-sectional variance of the marginal utility of consumption is equal to its own lag plus a constant and a random component. Using general preference specifications and some assumptions about the nature of the random component, we provide...

Bidders who receive both "common-value'' and "private-value'' signals about the value of an auction prize cannot fully infer their opponents' information from the bidding, so may overestimate the value of the prize and, subsequently, regret winning. With multiple objects, prices in later...

We examine the dynamics of wealth accumulation distribution in Italy using data drawn from the Survey of Household Income and Wealth, a representative sample of the Italian population conducted by the Bank of Italy. We compare survey data with national accounts data and discuss sample...