We use a large data set of deductible choices in auto insurance contracts to estimate the distribution of risk preferences in our sample. To do so, we develop a structural econometric model, which accounts for adverse selection by allowing for unobserved heterogeneity in both risk (probability...

Sales commissions for residential real estate brokers historically average nearly six percent of a home’s closing price. Do brokers add sufficient value to justify those commissions? We address this question using a unique data set pertaining to sales of faculty and staff homes on the Stanford...

Traditional cost contingency estimation relies heavily on expert judgment based on various cost-engineering standards. This paper compares project stages, accuracy ranges, and cost contingencies recommended by the Association for the Advancement of Cost Engineering International and the Electric...

I develop a procedure for estimating how accurately people perceive their income tax schedules. Using Survey of Income and Program Participation data on hourly-paid workers, I reject the hypothesis of fully salient taxes. Younger workers seem particularly prone to misperceiving their taxes. Even...

A mechanism can be simplified by restricting its message space. If the restricted message space satisfies a certain “outcome closure property,” then the simplification is “tight”: for every S=0 any Nash equilibrium of the simplified mechanism is also an Nash equilibrium of the...

In this paper, we design a monetary policy for the euro area at the start of monetary union. We compare and ultimately combine Bayesian and worst-case analysis using four reference models developed at the ECB and estimated with pre-EMU synthetic data. We start by computing the cost of insurance...

The standard economic choice model assumes that the decision maker chooses from a set of alternatives. In contrast, we analyze a choice model where the decision maker encounters the alternatives in the form of a list. We present two axioms similar in nature to the classical axioms regarding...

Divorce laws regulate when divorce is allowed and establish each spouse's property rights over household assets. This paper examines how such laws affect the intertemporal behavior and the welfare of married couples. I build a dynamic model of household choice in which moving from a mutual...

In 2002 the Mexican government began a very large expansion of government-funded healthcare for the poor - specifically, people not employed in the formal sector. The program, Seguro Popular (SP), was rolled out sequentially across different areas in Mexico. This paper uses the variation in...

Competitive high ranking positions are largely occupied by men, and women remain scarce in engineering and sciences. Explanations for these occupational differences focus on discrimination and preferences for work hours and field of study. We examine if absent these factors gender differences in...