This paper introduces a dynamic model of the stochastic repayment behavior exhibited by delinquent credit-card accounts. Based on this model, we construct a dynamic collectability score (DCS) which estimates the account-specific probability of collecting a given portion of the outstanding debt...

We examine a generic three-stage game for two players with alternating moves, where the first player can choose the level of adjustment cost to be paid in the last period for modifying the action she announced in the first period. In the resulting continuum of commitment options, convexifying...

The internal rate of return (IRR) is generally considered inferior to the net present value (NPV) as a tool for evaluating and ranking projects, despite its inherently useful comparability to the cost of capital and the return of other investment opportunities. We introduce the "selective IRR,"...

The world economy is undergoing dramatic changes, largely driven by the new availability of fine-grained information. Innovative ways of using data—large and small—have also prompted a rethinking of the boundaries for the combination and use of knowledge. The strategic design of information...

Complex economic problems often lack the structure for the application of standard comparative statics techniques. Generalized Monotonicity Analysis (GMA) extends usual methods in several directions. First, it provides a new way of endogenously generating parameter moves that yield monotonicity....

We consider a general scheme to construct Bayesian incentive compatible mechanisms using a suitable 'variable mechanism parametrization.' The key idea is to perturb a given direct mechanism, which might not be truth revealing, introducing sufficient variability as a function of agents'...

Sharing markets create mutual insurance for consumers who are unsure about their future needs for goods, thus rendering products more valuable both before and after the purchase. By embedding intelligence in their products, enabling them to sense, monitor, and authorize transfers between users,...

This paper considers inter-mediation in a differentiated short-term housing market where heterogeneous agents may stay at a hotel or at one of several private hosts' properties, below or above hotel quality. The collaborative-housing market fails when agents' hidden actions are non-contractable....

We provide a technique for constructing optimal multiattribute screening contracts in a general setting with one-dimensional types based on necessary optimality conditions. Our approach allows for type-dependent participation constraints and arbitrary risk profiles. As an example we discuss...