In dynamic optimization problems with multiple continuous state variables and multiple continuous controls, the method of endogenous gridpoints (ENDG) generates an irregular collection of gridpoints for which standard interpolation techniques do not apply, while alternative interpolation methods...

The method of endogenous gridpoints (ENDG) significantly speeds up the solution to dynamic stochastic optimization problems with continuous state and control variables by avoiding repeated computations of expected outcomes while searching for optimal policy functions. While the method has been...

We present a macroeconomic model calibrated to match both microeconomic and macroeconomic evidence on household income dynamics. When the model is modified in a way that permits it to match empirical measures of wealth inequality in the U.S., we show that its predictions (unlike those of...

This paper examines how investments in health, through spending on preventive care, affect subsequent spending on medical care among the retired population.Augmenting a traditional dynamic consumption-savings model with two medical care goods, I estimate a structural life cycle model using data...

This paper examines whether risk-based pricing promotes risk-reducing effort. Such mechanisms are common in private insurance markets, but are rarely incorporated in government assurance programs. We analyze accidental underground fuel tank leaks--a source of environmental damage to water...

We analyze the behavior of game-show contestants who play a one-shot game called Friend or Foe. While it is a weakly dominant strategy not to cooperate, almost half the contestants on the show choose to play friend.' Remarkably, the behavior of contestants remains unchanged even when stakes are...