Economists use relational or reputational concerns to explain the implicit enforcement of contracts. Both mechanisms require special assumptions concerning contracting parties' identities; in particular, these assumptions would not hold in one-period settings in which outcomes cannot affect...

Psychologists and economists have argued that rewards often have hidden costs. One possible reason is that the principal may have incentives to offer higher rewards when she knows the task is difficult. Our experiment tests if high rewards embody such bad news and if this is correctly perceived...

Both psychologists and economists have argued that rewards often have hidden costs. One possible reason is that the principal may have incentives to offer higher rewards when she knows the task to be difficult. Our experiment tests if high rewards embody such bad news and if this is perceived by...

The first essay explains why credit contracts in developing countries are often denominated in foreign currencies, even after many of these economies succeeded in controlling inflation. I propose a new interpretation based on the demand for insurance against real aggregate shocks. The fact that...

These four essays concern the theory of games and its application to economic theory. The first two, closely linked, chapters are an investigation into the foundational question of the sensitivity of the predictions of game theory to higher-order beliefs. Impact of Higher-Order Uncertainty with...

In this study we examine the impact of internet use on the duration of non-sequential search in the housing market. We develop a model of partial equilibrium in the housing market which suggests an ambiguous effect on the search duration when internet resources are employed in the search. In...