We quantitatively investigate the allocative and welfare effects of secondary markets for cars. Gains from trade in these markets arise because of heterogeneity in the willingness to pay for higher-quality (i.e., newer) goods, but transaction costs are an impediment to instantaneous trade. We...

We then consider the group of peers (or friends) as an object of choice. We characterize the peer group's optimal composition for each individual in the population. We show that, for each individual, there is a large equivalence class of optimal groups, potentially with maximal variance of...

This paper explores the extent to which markets constrain intertemporal preferences. First, we show that without transaction costs, agents are immune to exploitation in competitive markets. In particular, a sequence of trades leaving any market participant strictly worse off (termed a money...

This paper uses a new data set on domestic child adoption to document the preferences of potential adoptive parents over born and unborn babies relinquished for adoption by their birth mothers. We show that adoptive parents exhibit significant biases in favor of girls and against...

multiplier) at equilibrium of a class of static economies (complete and incomplete information and with different social structures, eg. overlapping groups, simple networks) of social interactions, derive comparative statics analysis of such properties and study identification with respect to...

We study the wealth distribution in Bewley economies with idiosyncratic capital income risk (entrepreneurial risk). We find, under rather general conditions, a unique ergodic distribution of wealth which displays fat tails (a Pareto distribution in the right tail).

This paper provides a theory of government intervention, such as government ownership, regulation, mandatory public schooling, subsidies, and industrial policy, as an optimal policy response due to the inability to commit not to expropriate private investment or bail agents out. If the...

We consider a generic environment with (potentially) multiple equilibria and analyze conditions for identification of the structural parameters. We then study conditions that allow for the estimation of both the structural parameters and the “selected equilibriumâ€. We focus on a...

In this paper we study theoretically the dynamics of the distribution of wealth in an Overlapping Generation economy with bequest and various forms of redistributive taxation. We characterize the transitional dynamics of the wealth distribution and as well as the stationary distribution. We show...