In this article we study the corporate tax effects on credit market equilibria. In particular, we develop a model that accounts for five pieces of evidence: i) the existence of a tax incentive to borrow, ii) the negative relationship between leverage and profitability, iii) the existence of...

In this paper we apply a real-option model to study how tax rate uncertainty affects a firm's decisions about both the timing and the source of finance of an investment project. We show that debt finance (i) encourages entry and (ii) mitigates the e¤ect of tax rate uncertainty on entry timing.

In this paper we apply a real-option model to study the effects of tax rate uncertainty on a firm's decisions. In doing so, we depart from the relevant literature, which focuses on fully equity-financed investment project. By letting a representative firm borrow optimally, we show that debt...

In this paper we apply a real-option model to study the effects of tax rate uncertainty on a firm's decisions. In doing so, we depart from the relevant literature, which focuses on fully equity-financed investment projects. By letting a representative firm borrow optimally, we show that debt...

This article reviews recent literature on joint liability lending in micro-credit markets characterized by adverse selection. This mode of lending consists of granting individual loans to wealthless borrowers provided that they form groups. If a group does not fully repay its obligations, then...

In this paper we study optimal choices of self-selection into politics and commitment once in office on the part of citizens with heterogeneous abilities and heterogeneous motivations. Politicians can moonlight, i.e., they can work in the market sector while appointed in parliament. Our...

This paper tackles the issue of unverifiable quality of after-sales insurance services, such as a prompt reimbursement of damages. A dynamic model is introduced in order to allow reputation to emerge as a means of disciplining insurance firms to deliver high quality. The equilibrium of a...

Some recent health economics papers suggest that increasing wage in the nursing labor market with the aim of reducing shortage may yield a negative effect on the average productivity and/or the average motivation of applicants attracted. Some feminist economics papers criticize this inefficiency...

We consider an economy made up by two industrial sectors. Sector A produces a good. Sector B supplies a social service. Each industry is characterized by a Hotelling-type linear segment where two firms are located at the extremes. We compare two different economic systems. A market economy where...