The authors argue that endogeneity of transportation costs needs to be taken into account when estimating the effect of distance on trade. Otherwise, the estimates of the distance effect may be biased and inconsistent. Endogenous transportation can introduce slope heterogeneity and spatial...

When an anti-dumping (AD) duty is imposed, a foreign exporting firm must decide whether to stay in the market and how to price its product. This paper investigates both of these decisions, but focuses on firm pricing by exploring the pass-through of the AD duty. Our model of exporter behavior...

A large body of behavioral finance literature focuses on the behavioral biases of individual investors in their trading choices. The research shows that sophistication is related to the level at which these behavioral biases influence investors' trading choices. This chapter reviews the...

Analyzing differences in the quality of information-intensive goods may require information processing from consumers. Focusing on the differences between organic and conventional milk, we propose analyzing such markets using a tractable micro-founded discrete choice framework with Rational...

The purpose of this paper is to study the closed-end fund discount in Miller's (1977) framework. Miller's theory states that in the simultaneous presence of (1) short sale restrictions and (2) dispersion of investors' opinions, securities become overvalued. We show that discounts of...

We develop a model of endogenous quality choice and trade that combines non-iceberg trade costs and non-homothetic preferences to capture the effect of importer-exporter income differences on geographic variation in quality and export prices. The differences in income substantially alter the...