We present a system of behavioral axioms for preferences over menus that is motivated by three assumptions. First, the decision maker is uncertain ex ante (i.e. at the time of choosing a menu) about her ex post (i.e. at the time of choosing an option within her chosen menu) preferences over...

In the transfer problem debate with Keynes, Ohlin suggests that income eects should lessen relative price variations necessary to pro- duce trade surpluses, and that that impact is related to the degree of openness of the economy. We illustrate this mechanism in a sim- ple model, and take it to...

This paper extends Dornbusch's overshooting model by proposing a generalized interest parity condition (GIP), which captures a sluggish adjustment on the asset market. The exchange rate model under the GIP is able to reproduce the delayed overshooting and the hump-shaped response to monetary...

This paper studies the effects of risk attitudes on effort exerted under different monitoring schemes. Our design employs a theoretical model that relaxes the assumption that agents are risk neutral and investigates changes in the effort and quality of work as monitoring varies. The predictions...

Individual risk attitudes are frequently used to predict decisions regarding education. However, using risk attitudes as a control variable for education decisions has been criticized because of potential issues related to reverse causality. Causality between risk aversion and education is...

This paper develops a general method to solve the optimal nonlinear income tax model with one action (individual pre-tax income) and multidimensional characteristics. Individuals differ in terms of skills and belong to different groups. A group is a subset of individuals with the same vector of...

This paper quantifes the welfare gains from intra-form trade. We propose a model where rms have access to competing market strategies: export and multinational production. Due to technolog- ical appropriability issues, foreign affiliates import an intermediate input from the home headquarters....

We show that if the statistical distribution of utility functions in a population satisfies a certain condition, then a Condorcet winner will not only exist, but will also maximize the utilitarian social welfare function. We also show that, if people's utility functions are generated according...