The main results are the following ones. First, the only consumption that can be part of an equilibrium is the one that optimizes the inter-temporal utility of the agent if he refuses the contract. Second, a necessary condition for an action to be implementable is that, at the optimal...

We show that when the prior that the return is high is below (above) a half, the agent is rewarded for low (high) signals. This is problematic if the agent can hide options, because then he might show only low signals. The possibility of hiding endogenously affects current and future information...

We consider a college admissions problem with uncertainty. We realistically assume that (i) students' college application choices are nontrivial because applications are costly, (ii) college rankings of students are noisy and thus uncertain at the time of application, and (iii) matching between...

We introduce and solve a new class of static portfolio choice problems, where only the best realized alternative matters. A decision maker must simultaneously choose among independent ranked options, and the better alternatives have a lower chance of panning out. Each choice is costly, and just...

In many economic environments, firms compete in output markets that are not competitive, either because there is strategic interaction such as in a patent race or an oligopoly, or there are externalities such as knowledge spillovers. Very often, having skilled workers is crucial for success in...

This paper studies the effects of differential tax treatment toward married and single individuals in the US on marriage formation and composition, divorce and labor supply. We develop a marriage market model with search frictions and heterogeneous agents that is sufficiently rich to capture key...

We solve the principal-agent problem of a monopolist insurer selling to an agent whose riskiness (loss chance) is private information, a problem introduced in Stiglitz's (1977) seminal paper. For an \emph{arbitrary} type distribution, we prove several properties of optimal menus, such as...