We consider an economy where individuals privately choose effort and trade competitively priced securities that pay off with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then standard functional form restrictions ensure that...

This dissertation studies the optimal regulatory response to financial crises. The first two chapters focus on prevention of financial crises, and the third chapter focuses on resolution of financial crises.Chapter 1 develops a quantitative theory of overborrowing based on a systemic risk...

We study a general class of priority-based allocation problems with weak priority orders and identify conditions under which there exists a strategy-proof mechanism which always chooses an agent-optimal stable, or constrained efficient, matching. A priority structure for which these two...

This paper studies the efficiency of competitive equilibria in environments with a moral hazard problem and unobserved states, both with retrading in ex post spot markets. The interaction between private information problems and the possibility of retrade creates an externality, unless...

This paper revisits the no-attachment assumption in job search models with random productivity fluctuations and Nash-bargaining. Both workers and firms value the option to remain in attachment: firms profit from a reduced hiring cost, while workers gain from a higher reservation wage when...