This paper studies observational learning in a consumer search environment. In our model, consumers observe the purchasing decision of a predecessor before deciding which rm to visit. We show that if consumers emulate their predecessor and initiate their search at the rm she purchased from, a...

The market selection hypothesis posits that over time more successful traders will stay in the market, whereas those with trading losses will exit. If success is at least somewhat determined by behavior, then as a result of market selection traders who survive in markets behave differently than...

In general, linear multivariate rational expectations models do not have a unique solution. This paper reviews some procedures for determining whether there exists a solution, whether it is unique, and infers on the dimension of indeterminacy and the number of free parameters in a...

We consider a model where exporting requires finding a local partner in each market. Contracts are incomplete and exporters must learn the reliability of their partners through experience. In the model, export behavior is state-dependent due to matching frictions, although there are no sunk...

This paper investigates the eectiveness of immigration control policies when the duration of stay of illegal immigrants is endogenous because they may return home voluntarily. It shows that return intentions matter. First, we nd that spending on border enforcement can potentially increase the...

Incentivized methods for eliciting subjective probabilities in economic experiments present the subject with risky choices or bets that encourage truthful reporting. We discuss the most prominent elicitation methods and their underlying assumptions, provide theoretical comparisons, and propose...

The unraveling argument says that when a rm may produce dierent qualities and quality is unknown to consumers, the rm has an incentive to disclose the private information as in any pool of rms there is a best quality rm and this rm has an incentive to disclose. Recent literature has established...

Studying a one-sector economy populated by finitely many heterogeneous households that are subject to no-borrowing constraints, we confirm a conjecture by Frank P. Ramsey according to which, in the long run, society would be divided into the set of patient households who own the entire capital...

We analyze the optimal provision of information in a procurement auction with horizontally dierentiated goods. The buyer has private information about her preferred location on the product space and has access to a costless communication device. A seller who pays the entry cost may submit a bid...

We determine workforce composition and wages in rms in the presence of productivity spill-overs between co-workers. In equilibrium, workers' wages depend on the production struc- ture of rms, own group size, and aggregate workforce composition in the rm. We estimate the wage eects of workforce...