One of the approaches in consumer theory considers each product as a collection of attributes. As opposed to the traditional approach, according to which consumer preferences for products are the underlying features of economic modeling, they are now derived from the composition and strength of...

Monderer and samet (1989) generalize Aumann's (1976) agreeing to disagree result for the case of beliefs. They show that if the posteriors of an event are "common p-blief" then they cannot differ by more than 2(1-p). We provide a different proof of this result with a lower bound of 1-p. An...

This paper shows that if rationality is not common knowledge, the no-trade theorem of Milgrom and Stokey (1982) fails to hold. We adopt Monderer and Samet's (1990) notion of common p-belief and show that when traders entertain doubts about the rationality of other traders, and even if these...

Many have observed that political candidates running for election are often purposefully expressing themselves in vague and ambiguous terms. Moreover, the candidates' ambiguity typically involves precisely those issues which stand in the center of public debate. In this paper, we provide a...

The Coase theorem states that in public good problems, when there are no transaction costs, once property rights are well defined, the efficient outcome will always result. In particular, the assignment of property rights has, by itself, no efficiency implications; different allocations of...

This paper studies how different demographic groups respond to incentives by comparing performance in the GRE examination in high and low stakes situations. The high stakes situation is the real GRE examination and the low stakes situation is a voluntary experimental section of the GRE that...

Abstract We analyze the behavior of foreign banks who sequentially provide credit to finance projects in an emerging market. The foreign banks are exposed to both project-risks and the macro-economic risk of a currency crisis, and there are no bailout guarantees. Nevertheless, we show that it is...

We analyze a model of repeated franchise bidding for natural monopoly with contestable licensing -- a franchisee holds an (exclusive) license to operate a franchise until another firm offers to pay more for it. In a world where quality is observable but not verifiable, the simple regulatory...

We consider a neoclassical growth model with endogenous corruption. Corruption and wealth, which are co-determined in equilibrium, are shown to be negatively correlated. Richer countries tend to be less corrupt, and corrupt economies tend to be poorer. This observation gives rise to the...