Thus far, psychological input has been used in economics mainly to highlight the cognitive imperfections of market participants. The normative implication of behavioral economics in its current state is that imperfections of market participants should be rectified by psychologically informed...

This Article challenges the dogma of U.S. patent law that direct infringement is a strict liability tort. Impermissibly practicing a patented invention does create liability even if the infringer did not intend to infringe or know about the patent. The consensus is that this is a form of strict...

We show that allowing communication can increase optimal choices and efficiency in a multi-task, incomplete contracting, principal-agent setting. We study two simple communication protocols, one allowing for one or more requests on non-contractible choices, and the other allowing for a request,...

This paper argues that in the presence of trading frictions and agency problems, the interbank market may be overly fragile, in the sense that small changes in the liquidity of assets used as collateral may lead to large swings in haircuts and a potential credit freeze. Our results highlight...

Water supply has become a priority for developed and developing nations of the world. Conventional water resources alone cannot meet the growing demand for water in urban cities. Management of the problem is amplified by uncertainty associated with different development strategies. Singapore has...

This paper addresses a fundamental, yet unresolved, question: is statistical discrimination a market failure? I consider the problem for a utilitarian social planner who operates in an environment with imperfectly observable human capital investments. It is found that the informational problem...

In this paper we model wholesale electricity markets as infinitely repeated games played under demand uncertainty. We examine the uniform-price auction, showing that symmetric bidding at the price cap constitutes the optimal collusive equilibrium under both perfectly inelastic demand and demand...

In this paper, we consider the costs and benefits of transactions privacy. In the environment we consider, privacy is the concealment of potentially useful information, but concealment also potentially bestows benefits. In some versions of the environment, the standard Coasian logic applies:...

This paper considers the role of the monetary conditions index as a tool to coomunicate the stance of monetary policy. The MCI is a linear combination of interest rate and exchange rate changes. Canada and New Zeland are pioneers in its usage. While the MCI was intended to increase monetary...

This paper studies "voluntary bargaining agreements" in an environment where preferences over an excludable public good are private information. Unlike the case with a non-excludable public good, there are non-trivial conditions when there is significant provision in a large economy. The...