What determines how trade in a commodity is divided between privately negotiated transactions via quot;middle menquot; (dealer/brokers) in a telephone or quot;dealer marketquot; versus transactions via quot;market makersquot; (specialists) at publicly observable bid/ask prices? To address this...

The effect of incomplete information on the term structure of interest rates is examined in the framework of a pure exchange economy under uncertainty where aggregate output grows at a constant rate. If the growth rate is known, the term structure is flat. In contrast, the term structure is a...

This paper introduces the concept of Rational Belief Equilibrium (RBE) as a basis for a new theory of asset pricing. Rational Beliefs are probability beliefs about future economic variables which cannot be contradicted by the data generated by the economy. RBE is an equilibrium in which the...

In this paper, I study how heterogeneous preferences (heterogeneity in risk aversion and time discount factor) affect asset prices and risk sharing in a two-agent endowment economy, when markets are endogenously incomplete due to the contracting friction of limited enforcement. I find that...

Agricultural productivity in Sudan is historically known to be low, particularly in the traditional sector. Trueblood and Coggins (2001) stated that, Sudan's decrease in agricultural productivity during the period (1961-1991) was due to decreases in both efficiency and technology adoption....

The perfectly competitive market – a hypothetical situation free of market failure – serves as a benchmark for economic theory, providing the basis for the two fundamental welfare theorems. The radical abstractions of this idea makes it hard to grasp its full implications, however. In this...

Carbon budgets are a useful way to frame the climate mitigation challenge and much easier to agree upon than the allocation of emissions. We propose a mechanism with countries agreeing on the global carbon budget, while the decision to emit is decentralized at the country level. The revenue is...

It is a stylized fact of formal mathematical modeling that a 'space' cannot be described by attempts at parameterization of distances or areas (under or above curves) that feasibly could occur within the space. Tools for parameterization of mathematical spaces, such as Set Theory, Connectedness,...

Stephen A. Ross had an uncanny talent for translating economic theory into intuitive and rigorous concepts that were useful to researchers and practitioners alike. His most famous accomplishment, the arbitrage pricing theory, has inspired the ongoing search for factors that explain security...

We develop a general equilibrium model of banks' capital structure, featuring heterogeneous portfolio risk and an imperfectly elastic supply of bank equity stemming from financial market segmentation. In our model, equity is costly and serves as a buffer against insolvency. Banks are ex-ante...