We study economies with an essential role for liquid assets in transactions. The model can generate multiple stationary equilibria, across which asset prices, market participation, capitalization, output and welfare are positively related. It can also generate a variety of nonstationary...

Adverse selection death spirals in health insurance are dramatic, and so far, exotic economic events. The possibility of death spirals has garnered recent policy and popular attention because the pricing regulations in the Affordable Care Act of 2010 make health plans more vulnerable to them...

The Areeda-Turner rule in U.S. antitrust jurisprudence limits successful predatory pricing cases to circumstances where prices can be shown to have been set below marginal costs. While not cast so, the rule reflects the view that predatory pricing is rarely attempted; and even where attempted is...

This article extends the received literature on optimal provider payment by accounting for consumer heterogeneity in preferences for health insurance and health care. This heterogeneity breaks down the separation of the relationship between providers and the health insurer and the relationship...

We examine the relationship between resource abundance and several indicators of human welfare. Consistent with the existing literature on the relationship between resource abundance and economic growth, we find that resource-abundant countries tend to suffer low levels of human development....

American business is devoting a growing share of resources to identifying and developing a worker characteristic called ³leadership skill². Is there such a thing, and is it rewarded in labor markets? Using the Project Talent, NLS72 and High School and Beyond datasets, we show that men who...

Recent policy applications of control theory methods in dynamic economic models raise the issue of imposing the transversality condition for determining a unique optimal control policy. In a stochastic framework this issue involves alternative methods of estimation, which are discussed here both...

This paper makes two contributions in the context of seller-buyer relationships with bilateral relationship-specific investment. Firstly, we demonstrate how ex-post negotiations via double auctions can be used to alleviate and often resolve the hold-up problem. Secondly, we show that ex-post...

While the theoretical industrial organization literature has long argued that excess capacity can be used to deter entry into markets, there is little empirical evidence that incumbent firms effectively behave in this way. Bagwell and Ramey (1996) propose a game with a specific sequence of moves...