This paper analyzes the problem of weak instruments on identification, estimation, and inference in a simple nonparametric model of a triangular system. The paper derives a necessary and sufficient rank condition for identification, based on which weak identification is established. Then, nonparametric weak instruments are defined as a sequence of reduced-form functions where the associated ran...

This paper examines how employer and worker specific productivity shocks transmit to wage and employment in an economy with search frictions and firm commitment. I develop an equilibrium search model with worker and firm shocks and characterize the optimal contract offered by competing firms to attract and retain workers. In equilibrium risk-neutral firms offer risk-averse workers contingent co...

What does contract negotiation look like when some parties hold private information and negotiation frictions are negligible? This paper analyzes this question and provides a foundation for renegotiation-proof contracts in this environment. The model extends the framework of the Coase conjecture to situations in which the quantity or quality of the good is endogenously determined and to more ge...

Inductive learning aims at finding general rules that hold true in a database. Targeted learning seeks rules for the prediction of the value of a variable based on the values of others, as in the case of linear or non-parametric regression analysis. Non-targeted learning finds regularities without a specific prediction goal. We model the product of non-targeted learning as rules that state that...

We introduce grading into games of status. Each player chooses effort, producing a stochastic output or score. Utilities depend on the ranking of all the scores. By clustering scores into grades, the ranking is coarsened, and the incentives to work are changed. We first apply games of status to grading exams. Our main conclusion is that if students care primarily about their status (relative ra...

We show how to nonparametrically identify and estimate the distribution of random coefficients that characterizes the heterogeneity among agents in a general class of economic choice models. We introduce an axiom that we term separability and prove that separability of a structural model ensures identification. Identification naturally gives rise to a nonparametric minimum distance estimator. W...

We show how to nonparametrically identify the distribution that characterizes heterogeneity among agents in a general class of structural choice models. We introduce an axiom that we term separability and prove that separability of a structural model ensures identification. The main strength of separability is that it makes verifying the identification of nonadditive models a tractable task bec...

Leaders and historians see prestige as important, but international relations theorists have neglected the concept, in part for lack of a clear definition. It is proposed that a party “holds prestige” when group members generally believe that they generally believe that the party has a certain desirable quality, and this situation gives the party perceived power in the group. The definition gai...

A decision maker is characterized by two binary relations. The first reflects decisions that are rational in an “objective” sense: the decision maker can convince others that she is right in making them. The second relation models decisions that are rational in a “subjective” sense: the decision maker cannot be convinced that she is wrong in making them. We impose axioms on these relations that...