In spatial competition, public infrastructure plays a crucial role in determining product market outcomes. In our model, consideration of infrastructure’s impact on the product market drives the voting behavior of consumers in their dual role as voter/taxpayers. The spatial heterogeneity of...

This paper constructs a model of the provision of commercial music in which some consumers (enthusiasts) enjoy diversity and others (faddists) prefer to follow what is popular. Record companies sign up bands, only some of whom will 'succeed' - a process modelled in a number of alternate ways -...

Recent international climate negotiations suggest that complete agreements are unlikely to materialize. Instead, partial cooperation between like-minded countries appears a more likely outcome. In this paper we analyze the effects of such partial cooperation between like-minded countries. In...

This paper studies the behavior of a central bank that seeks to conduct policy optimally while having imperfect credibility and harboring doubts about its model. Taking the Smets-Wouters model as the central bank.s approximating model, the paper's main findings are as follows. First, a central...

We study a model where an entrant chooses between online and offline markets to compete with an offline-market incumbent. When consumers buy a product from the online market, they cannot inspect the product's quality prior to purchase. Conventional wisdom and some literature suggest that this...

We study the identification and estimation of first-price auction models with independent private values where bidders are risk averse and there is ambiguity about the valuation distribution. When bidders' preferences are represented by the maxmin expected utility of [Gilboa and Schmeidler,...

Moving average and stochastic volatility are two important components for modeling and forecasting macroeconomic and financial time series. The former aims to capture short-run dynamics, whereas the latter allows for volatility clustering and time-varying volatility. We introduce a new class of...

The financial crisis of 2007 – 2009 began with a major failure in credit markets. The causes of this failure stretch far beyond inadequate mathematical modeling (see Donnelly and Embrechts [2010] and Brigo et al. [2009] for detailed discussions from a mathematical finance perspective)....

In this paper, I investigate the origins of social trust within Vietnam. By combining a unique contemporary survey of households with historical data on weather variation, I show that individuals who are heavily threatened by negative weather fluctuation exhibit more trust in neighbours and...

We study an overlapping-generations model with private externalities on a public good (e.g. the environment). Emergent politico-economic equilibria, depending on model primitives (e.g. the degree of externality), imply that average income and environmental outcomes may be related positively or...