The paper addresses one of the disappointments that the liberal has faced intermittently over the past two hundred years: the apparent lack of relish by the public at large for democracy.

We build a model of credit card payments where the retailers are allowed to charge differential prices depending on the instrument of payment chosen by the consumer. We follow the approach in Rochet and Wright (2010) but assume a credit card system without any type of non-surcharge rule. In a...

This study contributes to the small theoretical literature on human smuggling by assuming for the first time asymmetric information in analysis. The assumption raises the possibility of an adverse selection equilibrium where only exploitative smugglers are employed at a low fee even though...

Consumers buying goods online often cannot physically inspect the products prior to purchase. Thus an online market may turn what is usually regarded as a search good into an experience good. We investigate how this feature, together with other features of the marketplace, affects a firms choice...

In the context of partitional knowledge models, we prove that, in a monotonic model, any cycle equation can be obtained as the product of cycle equations corresponding to cycles of length two. Hence, if a model is monotonic, has finite states, and players' posteriors satisfy all cycle equations...

In this paper we study the endogenous choice to accept fiat objects as media of exchange, the fundamentals that drive their acceptance, and their implications for their bilateral nominal exchange rate. To this end, we consider a small open economy where agents have no restrictions on what...

Empirical work in macroeconometrics has mostly restricted to using VARs, even though there are strong theoretical reasons to consider general VARMAs. This is perhaps because estimation of VARMAs is perceived to be challenging. In this article, we develop a Gibbs sampler for the basic VARMA, and...

Keynes famously claimed 'soon or late, it is ideas, not vested interested which are dangerous for good or evil'. His neoliberal critics have frequently concurred with this contention, and have happily used the example of Keynes to illustrate it. But is 'the power of ideas' consistent with...

We study the word-of mouth effect on movies with platform release, a common marketing strategy in the motion picture industry. We construct a theoretical model which shows that the word-of-mouth effect together with a sliding-percentage contract between the movie distributor and exhibitors gives...

Extracting a trend component from nonstationary data is one of the first challenges in estimating a DSGE model. The misspecification of the component can distort structural parameter estimates and translate into a bias in policy-relevant statistic estimates. This paper investigates how important...