We show that on-demand insurance contracts, an innovative form of coverage recently introduced through the InsurTech sector, can serve as a screening device. To this end, we develop a new adverse selection model consistent with Wilson (1977), Miyazaki (1977) and Spence (1978). Consumers have...

Consumers are often skeptical about purchasing foreign products and many voters are resistant to economic globalization. To better understand the factors underlying these trends, we consider consumers' intuitive understanding of international trade. We find that consumers are intuitive...

In June 2013, the High-Level Conference of Middle-Income Countries held in Costa Rica, organised by the United Nations Industrial Development Organization (UNIDO), ventured an intriguing look into the future of development. In particular, the conference highlighted the role of networks in...

This paper provides risk/reward evaluation and legal analysis of foreign investing under Cuban Law No. 118 (2014). Section I addresses dynamic changes in Cuba since 2008. Section II examines reforms of Cuban foreign investment laws. Section III explores investment options such as import/export,...

This paper explores the socially optimal level of insurance given that individuals are subject to behavioral biases, in particular narrow framing and loss aversion. The central issue of this normative analysis is whether or not a social welfare function (SWF) should take into consideration the...

This paper presents two arguments in favor of the sole use of an income tax for redistribution purposes. The first is that most findings on nonlinear commodity taxation such as Mirrlees's formulae for Pareto efficiency, Seade's results on zero tax rates at the endpoints of the scale, and the...

We compare the private and social incentives for privacy when sellers can commit to transparent privacy policies that are understood by consumers. The purpose is to establish a baseline for how well markets perform when firms' privacy policies are common knowledge. In this setting, if the market...

I discuss some key issues raised by behavioral economics for better understanding the working of the labor market. Amongst the key points in this paper are: (i) a revised modeling of the labor supply curve, with a specific focus on the target income approach (ii) elaborating on the importance of...

The government often provides relief against large risks, such as disasters. A simple, general rationale for this role of government is considered here that applies even when private contracting to share risks is not subject to market imperfections. Specifically, the optimal private sharing of...

A method for handling monotonicity constraints in optimal control problems is applied in order to correct a technical weakness of optimal nonlinear taxation models with many commodities, caused by the neglect of a second order constraint for utility maximization. We conclude that all the optimal...