We develop a general equilibrium model of trade with endogenous human capital acquisition in job specific skills and imperfectly observable skills. We show that even if there are no ex-ante fundamental differences between countries there may be equilibria under international trade with...

This paper asks whether statistical discrimination is a market failure. I consider the problem for a utilitarian social planner who operates in an environment that can generate statistical discrimination as an equilibrium phenomenon. It is found that there are potential efficiency gains from...

Constrained efficient provision of an excludable public good is studied in a model where preferences are private information. The provision level is asymptotically deterministic, making it possible to approximate the optimal mechanism with a mechanism that provides a fixed quantity of the good...

This paper asks whether statistical discrimination is a market failure. I consider the problem for a utilitarian social planner who operates in an environment that can generate statistical discrimination as an equilibrium phenomenon. It is found that there are potential efficiency gains from...