This paper studies a general equilibrium model with an investor controlled firm. Shareholders can vote on the firm’s production plan in an assembly. Prior to that they may trade shares on the stock market. Since stock market trades determine the distribution of votes, trading is strategic....

Language is arguably a powerful coordination device in real-life interactions. We here develop a game-theoretic model of two-sided pre-play communication that generalizes the cheap-talk approach by way of introducing a meaning correspondence between messages and actions, and postulating two...

We study financial markets in which both rational and overconfident agents coexist and make endogenous information acquisition decisions. We demonstrate the following irrele- vance result: when a positive fraction of rational agents (endogenously) decides to become informed in equilibrium,...

In a common-values election with two candidates voters receive a signal about which candidate is superior. They can acquire information that improves the precision of the signal. Electors differ in their information acquisition costs. For large electorates a non negligible fraction of voters...

We study the cores of non-atomic market games, a class of transferable utility co- operative games introduced by Aumann and Shapley [2], and, more in general, of those games that admit a na-continuous and concave extension to the set of ideal coalitions, studied by Einy, Moreno, and Shitovitz...

This paper explores the relationship between optimal leverage and credit risk under ownership links. It develops a structural model of a parent and a subsidiary, which issues debt in its own name under a guarantee by the parent. We find that zero leverage can be optimal for the guarantor, while...

The existence of collateral requirements to guarantee repayment on issued securities reduces in general the efficiency of competitive equilibria. The general equilibrium analysis is presented in a world where reputation plays no role, and the lender always expects a future payment equal to the...

A definition of set-wise differentiability for set functions is given through refining the partitions of sets. Such a construction is closely related to the one proposed by Rosenmuller (1977) as well as that studied by Epstein (1999) and Epstein and Marinacci (2001). We present several classes...

We analyze the evolution on the design of a policy measure promoted by the Spanish Government: the Ramón y Cajal Program. In the first calls of the Program, an eligibility requirement for a researcher was a preacceptance from at least one Spanish research insti- tution. This requirement was...

Beneficiaries of Social Security face restrictions on how much they can earn without incurring the earnings test (ET). In 2000, President Clinton eliminated the ET between age 65 and 70. In this paper I evaluate how this removal impacts the long-term finances of the Trust Fund. I find that...