Our paper provides a justication for the proportional representative (PR) election system for politically diversied societies. We employ the Shapley value concept to measure the political power of parties in a parliament. We prove that for the PR system if parties' size add up to 1 and is...

In this paper we analyze a mechanism that is particularly relevant to the workings of the Great Recession: we explain how easier home fi?nancing and higher homeownership rates increase unemployment rates. To this purpose we build a model of job search with liquid wealth accumulation and...

Why do U.S. firms hold much more cash now than they did 30 years ago? Prior empirical studies have discovered a statistically significant positive relationship between firm cash holdings and cash flow volatility. Such findings, however, are subject to endogeneity problems. In this paper, I...

Consider a contest for a prize in which each player knows his own ability, but may or may not know those of his rivals (the complete or incomplete information regimes). Our main result is that, if the value of the prize is high, more e¤ort and output are engendered under incomplete information;...

This paper proposes a theory of sharecropping and interlinkage on the basis of seasonal variation of price and imperfectly competitive nature of rural product markets. First, a benchmark model is considered to show the optimality of sharecropping in the presence of price variation. This model is...

We show that o®shore outsourcing can occur even when there are no economies of scale or cost advantages for the foreign firms. What drives the phenomenon is that domestic firms, by accepting orders for intermediate goods, incur the disadvantage of becoming Stackelberg followers in the ensuing...

In this paper I calibrate unobserved labor-generated knowledge spillovers within and between six large macroeconomic sectors covering the U.S. civilian economy from 1948 to 1991. Using quality-adjusted data I show that manufacturing and trade & transportation are the main source of knowledge...

In multilingual labor markets agents with high proficiency in more than one language may be selected into occupations that require high levels of skill in communicating with customers or writing reports in more than one language. In this paper we measure this effect in Catalonia, where two...

We study simultaneous ascending auctions of identical objects when bidders are financially constrained and their valuations exhibit complementarities. We assume the budget constraints are known but the values for individual objects are private information, and characterize noncollusive...

This paper explores the implications of urban poverty for children’s educational attainment, a central measure of human capital that has a well-documented and pervasive influence on later-life demographic and labor force behavior. We compare levels of children’s schooling in Cairo and urban...