We consider the agency problem of a staff member managing microfinancing programs, who can abuse his discretion to embezzle borrowers' repayments. The fact that most borrowers of microfinancing programs are illiterate and live in rural areas where transportation costs are very high make staff's...

We analyze a standard environment of adverse selection in credit markets. In our environment, entrepreneurs who are privately informed about the quality of their projects need to borrow in order to invest. Conventional wisdom says that, in this class of economies, the competitive equilibrium is...

We analyze the use of discrete choice models for the estimation of risk aversion and show a fundamental flaw in the standard random utility model which is commonly used in the literature. Specifically, we find that given two gambles, the probability of selecting the riskier gamble may be larger...

Discrete choice methods are often used for the estimation of time preferences. We show that these methods have pervasive problems when based on random utility models, for which cases our results establish that the probability of selecting a later option over an earlier one may be greater for...

We extend Aumann's theorem [Aumann 1987], deriving correlated equilibria as a consequence of common priors and common knowledge of rationality, by explicitly allowing for non-rational behavior. We replace the assumption of common knowledge of rationality with a substantially weaker one, joint...

Do the contests with the largest prizes attract the most able contestants? Do contestants avoid competition? In this paper we show that the distribution of abilities plays a crucial role in determining contest choice. Positive sorting exist only when the proportion of high ability contestants is...

Using the assignment of students to schools as our leading example, we study many-to-one two-sided matching markets without transfers. Students are endowed with cardinal preferences and schools with ordinal ones, while preferences of both sides need not be strict. Using the idea of a competitive...

This paper studies a model of announcements by a privately informed government about the future state of the economic activity in an economy subject to recurrent shocks and with distortions due to income taxation. Although transparent communication would ex ante be desirable, we find that even a...

Scheduling jobs of decentralized decision makers that are in competition will usually lead to cost inefficiencies. This cost inefficiency is studied using the Price of Anarchy (PoA), i.e., the ratio between the worst Nash equilibrium cost and the cost attained at the centralized optimum. First,...

Calculating explicit closed form solutions of Cournot models where firms have private information about their costs is, in general, very cumbersome. Most authors consider therefore linear demands and constant marginal costs. However, within this framework, the nonnegativity constraint on prices...