We study the behaviour of prices and quantities in a model of bilateral trade with coordination frictions, capacity constraints, and risk aversion in small and large markets. The equilibrium markup over the expected return to the asset depends on the ratio of buyers to sellers and the level of...

Protection of common natural resources is one of the foremost challenges facing our society. Since Garrett Hardin published his immensely influential The Tragedy of the Commons, theorists have contemplated the best way to save common-pool resources—national parks, fisheries, heritage sites,...

Under uncertainty, regret is a function depending on both the realized outcome and forgone outcome on a state. This paper studies a general and simple model that only regret-based decisions are assumed without other restrictions such as additive separability, the existence of objective...

Europe was where research on general equilibrium models with rationing (GEMR) gained traction. The goal of our article is to explain how and why. We show that research on GEMR took off and developed in France and Belgium from the mid-1970s before expanding all around Europe. We also show that...

In contracts, the choice between vague standards and precise rules is central to both theory and practice. According to traditional contract theory, parties make this choice by balancing “front-end” transaction costs against “back-end” enforcement costs, apparently through a joint...

Common resources may be managed with inefficient policies for the sake of equity. We study how rationing the commons shapes the efficiency and equity of resource use, in the context of agricultural groundwater use in Rajasthan, India. We find that rationing binds on input use, such that farmers,...

Die Situation ist sehr ernst. Etliche Gaskunden werden im Winter ihre Heizung herunterdrehen oder ihre Produktion herunterfahren müssen. Je kälter der Winter, desto größer das Problem. Ökonomen sind sich weitgehend einig, dass die Politik die Entscheidung, wer wie viel Gas einspart, dem...

A central question concerning the economic motivation for the adoption of workers' compensation is the extent to which workers had access to their desired levels of private accident insurance around the turn of the century. If insurance were rationed then workers' primary option would have been...

There are a couple of well-known unsatisfactory properties in the notion of effective demand defined by Benassy and one by Dreze. This is why recent authors in disequilibrium analysis study the stochastic rationing mechanism. Douglas Gale proved the existence of the equilibrium with stochastic...

Markets that involve customers waiting for services or goods in queues whose length they cannot observe are studied. In these markets suppliers truncate queues that become so long that they jeopardize the supplier's future relations with the customer. The length of the queue and the probability...

We propose a new class of hedonic models with sticky prices and queues. Time replaces money as the invisible hand in the market. Unlike money, time is non-transferable to the trading partner. We prove the existence and uniqueness of the equilibrium, and we compare our model with the standard...

This paper investigates whether the minimum wage leads to inefficient job rationing. By not allowing wages to clear the labor market, the minimum wage could cause workers with low reservation wages to be rationed out while equally skilled workers with higher reservation wages are employed. This...

Stochastic rationing when the market does not clear draws attention because both Dreze (1975) and Benassy (1975) quantity-constrained equilibria have some undesirable features. Gale (1978)gave the existence proof of trade under uncertainty. His stochastic rationing depends on all the individual...

Common resources may be managed with inefficient policies for the sake of equity. We study how rationing the commons shapes the efficiency and equity of resource use, in the context of agricultural groundwater use in Rajasthan, India. We find that rationing binds on input use, such that farmers,...

In 1998, Christine Jolls, Cass Sunstein, and Richard Thaler published A Behavioral Approach to Law and Economics, one of the most important pieces of scholarship in decades. Their article famously proposes a departure from the neoclassical law and economics approach to legal analysis. Breaking...

Would a seller set non-market clearing prices and worry about resale that results from randomization and reduces inefficiency? We show that the optimal mechanism for selling a given quantity of a homogeneous good involves rationing if and only if the revenue function is convex at this quantity....

World War Two, rationing, and shortages limited the amount of food and other goods available to households. The new welfare state of Clement Attlee’s Labour Party and derationing were supposed to provide food and other consumption goods to meet the needs of households, but voters were...

Common resources may be managed with inefficient policies for the sake of equity. We study how rationing the commons shapes the efficiency and equity of resource use, in the context of agricultural groundwater use in Rajasthan, India. We find that rationing binds on input use, such that farmers,...

This paper shows that the capitalization of local amenities is effectively priced into land via a two-part pricing formula: a “ticket” price paid regardless of the amount of housing service consumed and a “slope” price paid per unit of services. We first show theoretically how tickets...

We develop a dynamic model of hospital competition where (i) waiting times increase if demand exceeds supply; (ii) patients choose a hospital based in part on waiting times; and (iii) hospitals incur waiting time penalties. We show that, whereas policies based on penalties will lead to lower...

This paper shows that the capitalization of local amenities is effectively priced into land via a two-part pricing formula: a "ticket" price paid regardless of the amount of housing service consumed and a "slope" price paid per unit of services. We first show theoretically how tickets arise as...

"This book examines the Pilsen revolt in Czechoslovakia in 1953, a spontaneous confluence of several individual, mutually incompatible protests, through which different parts of society reacted to the currency reform using different cultural traditions. The author analyzes how each protest...

This paper discusses the American debate over price controls and economic stabilization after World War II, when the transition from a war economy to a peace economy was characterized by bottlenecks in the productive system and shortages of food and other basic consumer goods, directly affecting...

From its inception in the marginal revolution of the 1880s, neoclassical economics has depended on the notion of a rational economic agent, a Homo economicus. Equally, the notion of rationality has been the focus of criticism from those wishing to dispute one or another aspect of mainstream...

During World War II the United States rapidly transformed its economy to cope with a wide range of scarcities, such as shortfalls in the amounts of ocean shipping, aluminum, rubber, and other raw materials needed for the war effort. This paper explores the mobilization to see whether it provides...

We study a variant of the multi-issue rationing model, where agents claim for several issues. In this variant, the available amount of resource intended for each issue is constrained to an amount fixed a priori according to exogenous criteria. The aim is to distribute the amount corresponding to...

Decentralized rationing problems are those in which the resource is not directly assigned to agents, but first allocated to groups of agents and then divided among their members. Within this framework, we define extensions of the constrained equal awards, the constrained equal losses and the...