SPATIAL EQUILIBRIUM OF TAXI SPOT MARKETS AND SOCIAL WELFARE

Equilibrium and Welfare in Insurance Markets with Time-Inconsistent Consumers

This paper studies the implications of unobservable consumer naivete on selection and welfare in a competitive insurance market with moral hazard. We identify two distinct forces of sophistication driving the formation of market equilibriums. One is that sophistication helps individuals internalize the incentive to take high effort by adopting some commitment devices, and hence sophisticates ar...

Equilibrium and welfare in markets with financially constrained arbitrageurs

We propose a multiperiod model in which competitive arbitrageurs exploit discrepancies between the prices of two identical risky assets traded in segmented markets. Arbitrageurs need to collateralize separately their positions in each asset, and this implies a financial constraint limiting positions as a function of wealth. In our model, arbitrage activity benefits all investors because arbitra...

Social Welfare Loss in Antidepressant and Antipsychotic Pharmaceutical Markets

We study allocative inefficiency under monopoly using a two-good general-equilibrium monopoly production model. Individuals are heterogeneous with respect to preferences. We compare social welfare under monopoly with welfare under perfect competition. We then apply this model to the antidepressant and antipsychotic pharmaceutical markets. We find that, for nine specific drugs, annual social-wel...

Price Elasticities and Social Welfare in Secondary Electronic Markets

Extended Abstract Electronic exchanges have enhanced the viability of secondary markets including markets for used books. Online used book markets offer a wider selection, lower search costs, and significantly lower prices than do physical used bookstores. The increased viability of online used book markets has caused concern among groups such as the Book Publishers Association and Author's Gui...

Mathematical Appendix to “ On Derivatives Markets and Social Welfare ”