Auctions are the allocation-mechanisms of choice whenever goods and information in markets are scarce. Therefore, understanding how information affects welfare and revenues in these markets is of fundamental interest. We introduce new statistical concepts, kand k-m-dispersion, for understanding the impact of information release. With these tools, we study the comparative statics of welfare vers...

This paper analyzes the dynamic interactions between the precision of information, technological development, and welfare within an overlapping generations model. More precise information about idiosyncratic production shocks has ambiguous effects on technological progress and welfare, which depend critically on the risk sharing capacity of the economy’s financial system. For example, we show t...

This paper studies trade in repeated auction markets. We show, for conditionally independent signals, that an owner’s decision to sell, expected prices, and continuation values are the same for a large class of auction mechanisms, extending the Revenue Equivalence Theorem to a multi-period setting. Further, we derive a robust No-Trade Theorem. For conditionally affiliated signals, we give condi...

Estimating Labor Supply Responses and Welfare Participation: Using a Natural Experiment to Validate a Structural Labor Supply Model In this paper, we formulate and estimate an economic model of labor supply and welfare participation. The model is estimated on data on single men from Quebec drawn from the 1986 Canadian Census. Budget sets for each work-welfare combination – accounting for income...

This study provides strong evidence for the stability of money demand of a semi-log form for the U.S., a log-log form for Japan and a semi-log form for Australia. This implies that there could be no finite satiation on the money demand curve as the nominal interest rate approaches zero and continue to stay near zero for a long period of time. The results support Friedman’s (1969) zero nominal i...

This paper studies welfare criteria under an environment in which a decision maker is endowed with a nontransitive preference relation. In such an environment, the classical utilitarian welfare criterion may not identify the welfare order, and the problem of maximizing the decision maker’s welfare becomes ambiguous. In order to find a criterion that applies to nontransitive preference relations...

Critics of current tying doctrine argue that metering ties can increase consumer welfare and total welfare without increasing output and that they generally increase both welfare measures. Contrary to those claims, we prove that metering ties always lower both consumer welfare and total welfare unless they increase capital good output. We further show that under market conditions we argue are r...

We provide a lifecycle framework for comparing the insurance value of disability benefits and the incentive cost. We estimate the risks that individuals face and the parameters governing the disability insurance program using longitudinal US data on consumption, health, disability insurance, and wages. We characterize the economic effects of disability insurance and study how policy reforms imp...

We consider a Cournot oligopoly setting in which consumers have an intrinsic preference for variety, while unit production costs of firms increase with the number of goods they produce. This environment exhibits a general under-provision of variety with respect to social welfare. JEL Classification Numbers: C70, L13, L20

We examine individuals’ distributional orderings in a number of contexts. This is done by using a questionnaire-experiment that is presented to respondents in any one of seven “flavours” or interpretations of the basic distributional problem. The flavours include inequality, risk, social welfare and justice. The issue of personal involvement in the distributional comparison is explicitly addres...