We develop an insurance market model where consumers (i) exhibit present-biased preferences, and (ii) suffer from physical pain in case of (health-) damage. They can exert preventive effort to reduce the probability of damage. Sophisticated consumers correctly anticipate their effort and...

The paper investigates political uncertainty as a source of regulatory risk. It shows that political parties have incentives to reduce regulatory risk actively: Mutually beneficial pre-electoral agreements that reduce regulatory risk always exist and fully eliminate it when political divergence...

In this paper we examine whether publishing the information underlying the central bank's decisions is socially desirable. We show that opacity may lead to the same equilibrium as transparency. However, additional equilibria may emerge under opacity with adverse consequences for welfare....