We model a reinsurance mechanism for the national unemployment insurance programs of euro area member states. The risk-sharing scheme we analyze is designed to smooth country-level unemployment risk and expenditures around each country's median level, so that participation and contributions...

We present and estimate a model in which the choice between entrepreneurship and wage work may be influenced by financial market imperfections. The model allows for limited liability, moral hazard, and a combination of both constraints. The paper uses structural techniques to estimate the model...

Consider an economy in which agents face income risk but interact in a stochastic financial network where the randomness is dictated by both chance and choice. We study the financial centrality of an agent defined as the ex-ante marginal social value of providing a small liquid asset to that...

This paper characterizes the utility possibility frontier resulting in a model of private voluntary provision of a public good. It is shown that ex-ante lotteries over resource distributions among the agents can be Pareto improving. A corollary is that an equal distribution of resources among...

We analyze dynamic risk-sharing contracts between profit-maximizing insurers and risk-averse agents who face idiosyncratic income uncertainty and can self-insure through savings. We study Markov-perfect insurance contracts in which neither party can commit beyond the current period. We show that...

We analyze optimal contractual forms and equilibrium matching in a double-sided moral hazard model of sharecropping similar to Eswaran and Kotwal (1985). We show that, with endogenous matching, the presence of moral hazard can reverse the matching pattern relative to the first best, and that...