We study a two-stage sequential search model with two agents who compete for one job. The agents arrive sequentially, each one in a different stage. The agents' abilities are private information and they are derived from heterogeneous distribution functions. In each stage the designer chooses an...

Ken Arrow (1998) asks, “What has economics to say about racial discrimination?” He replies – entirely correctly – that racial “segregation within an industry – that is, firms with either all black or all white labor forces” – may be explained by economic theory, but “the...

Many consumption goods have inherent attributes that are unknown to both consumers and producers of the good. This is reflected for example by the current discussion about potential harms of food products containing genetically modified organisms. The underlying paper analyzes consumers' demand...

In this paper we conduct two proper tests of overconfidence. We reject the hypothesis "the data cannot be generated by a rational model" in both experiments.

Behavioral implementation studies implementation when agents' choices need not be rational. All existing papers of this literature, however, fail to handle a large class of choice behaviors because they rely on a well-known condition called Unanimity. This condition says, roughly speaking, that...

We study the implications for pricing strategies and product offerings of consumers’ temptation when the differentiation of the product is horizontal. With horizontal differentiation, the temptation state is represented by a change in the consumers’ ideal product on the Hotelling line, so...

In this paper, we establish two different characterizations of Walrasian expectations allocations by the veto power of the grand coalition in an asymmetric information economy having finitely many agents and states of nature and whose commodity space is a Banach lattice. The first one deals with...

The focus of this study is on black markets which provide an important segment of the parallel economy. These markets operate in disequilibrium,search and information costs become very important.Trafficking in drugs taken as case, to explore both theoretically and empirically. The problem,...

We examine optimal selling mechanisms with ex-ante commitment for a nondurable good when the seller does not observe the times at which strategic consumers arrive on the market and how much they are willing to pay for the good. Assuming consumer risk neutrality, we demonstrate in this...

We conduct two experiments of the claim that people are overconfident, using new tests of overplacement that are based on a formal Bayesian model. Our two experi- ments, on easy quizzes, find overplacement. More precisely, we find apparently over- confident data that cannot be accounted for by a...