If workers are concerned about their relative wage, this can give rise to continuum of natural rates of unemployment that are perfect foresight equilibria. These equilibria can be Pareto ranked in the same order as their level of employment. Which equilibrium is reached depends upon expectations...

This paper analyses the sustainability of intergenerational transfers in Samuelson's consumption-loan model when agents are imperfectly informed about past events. The authors find that with mild informational constraints, transfers cannot be supported by pure-strategy equilibria. Mixed...

This paper analyzes responses to an administered questionnaire in which owner-managers of seventy-three small firms were asked how they would respond to booms and recessions. Responses suggest that quantity adjustments to demand fluctuations are more important than price adjustments. There is...

We model sex selection and the equilibrium sex ratio, when parents care about their child's marriage prospects. With intrinsic son preference, selection results in a male-biased sex ratio. This is inefficient, due to a marriage market congestion externality. Medical innovations that facilitate...

This paper analyzes survey data on the responses firms expect from their competitors when they change prices. There is evidence of an assymmetry in expected responses, which provides some support for modified versions of the kinked demand curve. The asymmetry in responses is found to be...

Using Hotelling's model of locational competition, the author shows that a moderate price floor destroys the maximal differentiation equilibrium, resulting in minimum differentiation. Equilibrium prices are lower than prices in the absence of a floor. A low price floor can lead to multiple...

Taylor's model of staggered contracts is an influential explanation for nominal inertia and the persistent real effects of nominal shocks. However, in standard imperfect competition models, if agents are allowed to choose the timing of pricing decisions, they will typically choose to...