We propose a model of equilibrium contracting between two agents who are "boundedly rational" in the sense that they face time-costs of deliberating current and future transactions. We show that equilibrium contracts may be incomplete and assign control rights: they may leave some enforceable...

We propose a model of bounded rationality based on time-costs of deliberating current and future decisions. We model an individual decision maker's thinking process as a thought-experiment that takes time and let the decision maker "think ahead" about future decision problems in yet unrealized...

This article has two objectives:Analyzes the impact of the introduction of tight solvency regulation for banks in transition economies. We show that, when the problems of soft budget constraints are severe, the introduction of these solvency regulations might paradoxically lead to a decrease of...