In this paper, we propose finite-sample inference procedures for parametric econometric models whose likelihood function is intractable and require simulation-based estimation methods, like indirect inference (Gourieroux, Monfort and Renault, 1993) or the efficient method of moments (Gallant and...

This paper studies a firm's choice between employing a worker and using an independent contractor to carry out a task. If the firm hires a worker, all residual rights reside with the firm. In contrast, when the firm deals with an independent contractor, it cannot interfere with the way the task...

This paper studies how the composition of income between mothers and fathers affects fertility and schooling investments in children, using data from the 1976 and 1996 PNAD, a Brazilian household survey. Income composition affects the time cost of fertility because mothers and fathers allocate...

This paper uses geography to shed light on the role of asymmetric information in asset pricing. Demonstrating that investors possess significant informational advantages in evaluating nearby investments, we find that active mutual fund managers overweight proximate firms in their portfolios and...

Many models in the economics literature deal with strategic situations with privately informed agents. In those models the information structure is assumed to be exogenous and common knowledge. In many applications information gathering is one of the strategic options available to agents. We...

In conducting experiments with multiple trials, outcomes from previous trials can impact on current behavior. One of the most obvious cases in which this can happen, and the case considered in this paper, is in an auction market experiment, where earnings from previous auction trials alter cash...

In this paper we develop a general equilibrium model in which firms finance investment by signing long-term contracts with a financial intermediary. Due to enforceability problems, financial contracts are constrained optimal, that is, they maximize the surplus of the contract subject to...

This paper shows that the best known empirical biases of the Black and Scholes (1973) option pricing formula can be explained by investors learning the parameters of the underlying fundamental process. In the context of an equilibrium model where dividend news evolve on a binomial lattice we...

This paper study the intertemporal consumption and investment problem in a continuous time setting when the secutity prices follow a Geometric Levy Process. Using stochastic calculus for semimartingals we obtain sufficient conditions for the existence of optimal consump- tion and investment...

In this paper we show how risk free bonds of different maturities can be used to replace state contingent debt in a general equilibrium dynamic optimal taxation problem. In particular, we show that if the state of the economy can only take a finite number N of values each period, then the...