Banking systems are at the center of the financial infrastructure of any country. It has become apparent after the subprime crisis that such systems cannot be studied by looking at their components individually (that is, in isolation). Thus, an integrated approach is needed.In this paper we...

I consider the possibility that individual agents' savings and portfolio choices can have negative externalities on public finances, whenever retirement consumption drops below a minimum level. Within this framework, I discuss optimal pension design. I show the optimality of two policies. The...

I consider the possibility that individual agents' savings and portfolio choices can have negative externalities on public finances, whenever retirement consumption drops below a minimum level. Within this framework, I discuss optimal pension design. I show the optimality of two policies. The...

Interconnectedness is an inherent feature of the modern financial system. While it contributes to efficiency of financial services, it also creates structural vulnerabilities: pernicious shock transmission and amplification impacting banks' capitalization. This has recently been seen during the...

Consider the problem of maximizing the revenue from selling a number of goods to a single buyer. We show that, unlike the case of one good, when the buyer's values for the goods increase the seller's maximal revenue may well decrease. We then identify two circumstances where monotonicity does...

We build a network formation game of firms with trade flows to study the adoption and usage of a new digital currency as an alternative to correspondent banking. We document endogenous heterogeneity and inefficiency in adoption outcomes and explain why higher usage may correspond to lower...

We propose a theory of how market power affects wage inequality. We ask how goods and labor market power jointly affect the level of wages, the Skill Premium, and wage inequality. We then use detailed microdata from the US Census between 1997 and 2016 to estimate the parameters of labor supply,...

Various approaches used in Agent-based Computational Economics (ACE) to model endogenously determined interactions between agents are discussed. This concerns models in which agents not only (learn how to) play some (market or other) game, but also (learn to) decide with whom to do that (or not).

In April 2003 the U.S. Federal Energy Regulatory Commission proposed a complicated marketdesign – the Wholesale Power Market Platform (WPMP) – for common adoption byall U.S. wholesale power markets. Versions of the WPMP have been implemented in NewEngland, New York, the mid-Atlantic states,...

Market concentration ratios are popular statistics for characterizing the extent of marketdominance in an imperfectly competitive market, but these ratios may not agree whencomparing two markets. Neither do they necessarily agree with the Herfindahl-Hirschman orentropy indices. This letter...