In this note I consider a simple proof of Arrow's Impossibility Theorem (Arrow 1963). I start with the case of three individuals who have preferences on three alternatives. In this special case there are 133=2197 possible combinations of the three individuals' rational preferences. However, by...

We propose a theory of contracting in long-term relationships, emphasizing the role of social institutions in conditioning players' joint selection of equilibria. Players adopt a social conditioning system in order to place boundaries on their recurrent negotiation and thereby sustain a...

This paper examines dynamic pricing behavior in retail gasoline markets for 19 Canadian cities over 574 weeks. I find three distinct retail pricing patterns: 1. cost-based pricing, 2. sticky pricing, and 3. steep, asymmetric retail price cycles that, while seldom documented empirically, resemble...

Multinational labor demand responds to wage differentials at the extensive margin, when a multinational enterprise (MNE) expands into foreign locations, and at the intensive margin, when an MNE operates existing affiliates across locations. We derive conditions for parametric and nonparamtric...

Often we are interested in the largest root of an autoregressive process. Available methods rely on inverting t-tests to obtain confidence intervals. However, for large autoregressive roots, t-tests do not approximate asymptotically uniformly most powerful tests and do not have optimality...

This paper proposes a new approach to modeling financial transactions data. A new model for discrete valued time series is proposed in the context of generalized linear models. Since the model is specified conditional on both the previous state, as well as the historic distribution, we call the...

This paper proposes and implements a tractable approach to detect group structure in panel data. The mechanism works by means of a panel structure model, which assumes that individuals form a number of homogeneous groups in a heterogeneous population. Within each group, the (linear) regression...

This paper investigates wheter, in what direction, and to what extent one mode of technology transfer is influenced by the strength of intellectual property protection that host nations provide. Using data spanning the period 1977 - 1999, we find little support for the claim that strengthening...

We explore the extension of James-Stein type estimators in a direction that enables them to preserve their superiority when the sample size goes to infinity. Instead of shrinking a base estimator towards a fixed point, we shrink it towards a data-dependent point. We provide an analytic...

We study contracting and costly renegotiation in settings of complete but unverifiable information, using the mechanism-design approach. We show how renegotiation activity is best modelled in the fundamentals of the mechanism-design framework, so that noncontractibility of renegotiation amounts...