This paper illustrates analytically the effects of cross-unit cointegration using as an example the conventional pooled least squares estimate in the spurious panel regression case. The results suggest that the usual result of asymptotic normality depends critically on the absence of cross-unit...

This paper follows up on recent studies of the Eurozone interest rate pass-through. Using a generalized empirical approach that allows for a variety of different specifications of the pass-through, including asymmetric adjustment, the role of interest rate expectations, proxied by EURIBOR...

We consider the problem of determining a set of optimal tariffs for an agent in the network, who owns a subset of all the arcs, and who receives revenue by setting the tariffs on the arc he owns. Multiple rational clients are active in the network, who route their demands on the cheapest paths...

We study the optimal design of mechanisms for the private provision of public goods in a simplesetting in which donors compete for a prize of commonly known value. The optimal mechanism in thismodel is the lowest-price all-pay auction – a mechanism in which the highest bidder wins but...

Most empirical evidence suggest that the Fisher effect, stating that inflation and nominal interest rates should cointegrate with a unit slope on inflation, does not hold, a finding at odds with many theoretical models. This paper argues that these results can be attributed in part to the low...

Panel unit root and no-cointegration tests that rely on cross-sectional independence of the panel unit experience severe size distortions when this assumption is violated, as has e.g. been shown by Banerjee, Marcellino and Osbat (2004, 2005) via Monte Carlo simulations. Several studies have...

When the asset market is incomplete, competitive equilibria are constrained suboptimal, which provides scope for Pareto improving interventions. Price regulation can be such a Pareto improving policy, even when the welfare effects of rationing are taken into account. An appealing aspect of price...

Previous literature proved the existence of an upper bound on the probability of trade in a bilateral trading problem when the valuations are distributed uniformly on [0,1]. This upper bound is achieved in the ½-double auction when the players play the Chatterjee-Samuelson strategies. We...

Existing experimental research on behavior in weakest-link games shows overwhelmingly theinability of people to coordinate on the efficient equilibrium, especially in larger groups. Wehypothesize that people will be able to coordinate on efficient outcomes, provided they havesufficient freedom...

We consider the well-known result of Arrow (1953) that the set of equilibria of an economy with complete markets coincides with the one of an economy with sequentially complete markets. We show by means of two examples that this results is problematic when there exist multiple equilibrium...