This paper analyzes mortgage-market equilibrium when borrower default costs are private information. By applying the approach of Rothschild and Stiglitz (1976), it is shown that asymmetric information regarding default costs distorts the contract choices available in the mortgage market,...

This paper analyzes mortgage-market equilibrium when borrower default costs are private information. By applying the approach of Rothschild and Stiglitz (1976), it is shown that asymmetric information regarding default costs distorts the contract choices available in the mortgage market,...

This paper analyzes a simple mobility-based model of mortgage lending and uses the results to illuminate the issue of mortgage points. The model predicts the points/interest-rate trade-off observed in the market and it also predicts that mobile borrowers choose low-points/high- rate contracts...

The spatial mismatch hypothesis, first stated by Kain (1968), argues that job decentralization in U.S. cities has contributed to low incomes and high unemployment rates for black Americans. Decentralization relocates job sites to white suburban communities far from the CBD, and housing...

This paper offers a new theoretical approach to urban squatting, reflecting the view that squatters and formal residents compete for land within a city. The key implication of this view is that squatters quot;squeezequot; the formal market, raising the price paid by formal residents. The...

This paper links the two nascent economic literatures on social networks and cultural assimilation by investigating the evolution of population attributes in a simple model where agents are influenced by their acquaintances. The main conclusion of the analysis is that attributes converge to a...

Analysis of social interactions has recently become an important area of economic research, and the focus of researchers in this area has increasingly shifted toward dynamic models. In one recent contribution, Brueckner and Smirnov (2007) analyze the evolution of population attributes in an...

Past models treat economic inequality as an exogenous condition that can provide individuals a dominant incentive to produce collective goods unilaterally. Here we part with that tradition so as to treat economic inequality and collective action as endogenous, and to examine whether economic...

We analyze a model of a dynamic political competition between two policy-motivated parties under uncertainty. The model suggests that electoral mandates matter: increasing the margin of victory in the previous election causes both parties to shift towards policies preferred by the winner, and...