Efficiency is analyzed in a Walrasian model of labor markets with adverse selection. Workers are distinguished by productivity and preferences; firms are distinguished by productivity and ability to distinguish workers. An equilibrium is defined to be constrained efficient if it cannot be...

The cost of gathering information about unfamiliar securities may lead to gains from standardization: firms issue a particular security because it is used by other firms. To support standardization as an equilibrium phenomenon, information must be nontransferable (otherwise it might be revealed...

This paper describes a Walrasian theory of markets with adverse selection and shows how refinements of equilibrium can be used to characterize uniquely the equilibrium outcome. Equilibrium exists under standard conditions. It is shown that, under certain conditions, a stable set exists and is...

When the profitability of investment depends on the general level of economic activity, entrepreneurs have an incentive to delay investments during a recession. Endogenous delay thus prolongs the recovery from a recession and heightens the effect of the boom. This paper describes a dynamic model...