We describe a unique institution used by 19th century Indian guilds to raise funds: The guild members agreed that on a particular day all but one of their shops would be shut. An auction would be held to determine which one shop would remain open, and the winning bid would go to the guild funds....

The authors consider a multi-community city where community quality is linked to residents'civic efforts, such as being proactive in preventing crime and ensuring the quality of publicly provided goods. Homeownership increases incentives for such efforts, but credit market imperfections force...

A buyer with private information regarding marginal valuation bargains with a seller to determine price and quantity of trade. Depending on parameter values, a high-valuation buyer wants either to reveal information to create value or to conceal it to capture value. In the first case,...

An institution found in many traditional societies is the extended family system (kin system), an informal system of shared rights and obligations among extended family for the purpose of mutual assistance. In predominantly non-market economies, the kin system is a valuable institution providing...

There is substantial evidence that home-ownership changes behavior and creates local spillovers. But theoretical research on the decision to own or rent a home has ignored such spillovers and does not confront the issue of the determination of the quality and composition of neighborhoods. This...

We show that individuals with identical preferences and abilities can self-organize into communities with starkly different civic environments. Specifically, we consider a multi-community city where community quality depends upon residents' efforts to prevent crime, improve local governance,...

Many long-term contracts incorporate a termination clause. This paper argues that when agents have hidden information, such a clause has a beneficial incentive effect-it enables a principal to screen agents' private information at a lower cost. In a two-period model, this paper characterizes the...

Sellers of consumer durables often provide financing to customers. This paper shows that when customers desire consumption smoothing and when financial markets are imperfect, a seller can find it optimal to offer a menu of deferred-payment plans. A monopolist seller price discriminates among...

We describe a unique institution used by 19th century Indian guilds to raise funds: The guild members agreed that on a particular day all but one of their shops would be shut. An auction would be held to determine which one shop would remain open, and the winning bid would go to the guild funds....