Internal whistle-blowing systems are supposed to fight misconduct within organizations. Because it is difficult to study their efficacy in the field, scientific evidence on their performance is rare. This is problematic, because these systems bind substantial resources and might generate the...

Diversification is a fundamental concept in economics, decision theory and finance. It also lies at the core of the Darwinian evolution argument, and diversifying behavior known as bet-hedging has been widely documented in other species. The central premise of this paper is that attitudes...

In this paper we deal with the basic two-period consumption saving problem where the first and second period consumption utility, respectively v and u is assumed to be concave as usually. Considering the usual assumption of identity of u and v, we show that prudence is fully characterized by the...

We propose a class of dynamic models that capture subjective (and hence unobservable) constraints on the amount of information a decision maker can acquire, pay attention to, or absorb, via an Information Choice Process (icp). An icp specifies the information that can be acquired about the...

This paper shows the general reversibility of every perfect foresight equilibrium of an overlapping generations economy. It then shows and characterizes the existence of reversible sunspot equilibria in these economies as well, which seems to be at odds with our intuition about the...

This paper combines the standard incomplete markets model of uninsurable idiosyncratic risks and borrowing constraints with the Arrow/Romer approach to endogenous growth to analyze the interaction of risk, growth, and inequality, the latter also endogenously determined in equilibrium. We derive...

This paper examines the consequences of international financial integration in a two-sector heterogeneous-agent dynamic general equilibrium model of occupational choice with financial constraints and idiosyncratic risks. We discuss the macroeconomic and distributional effects of financial market...

Predictable polarization is everywhere. We can often predict the different directions that people’s opinions—including our own—will shift over time. Empirical studies suggest that this is so whenever evidence is ambiguous, a fact that’s often thought to demonstrate human bias or...

This paper explores sufficient conditions for a continuous stationary Markov optimal policy and a concave value function in stochastic dynamic programming problems. Also, the paper addresses conditions needed for the differentiability of the value function. The paper uses conditions such as...

We identify a new mechanism through which cultural diversity affects economic outcomes, based on a model of culture as shared cognition. Under this view, cultural diversity matters because it increases strategic uncertainty. The model can help better understand a variety of disparate evidence,...