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Previous research shows that firms shroud high add-on prices in competitive markets with naive consumers leading to inefficiency. We analyze the effects of regulatory intervention via educating naive consumers on equilibrium prices and welfare. Our model allows firms to shroud, unshroud, or...
Persistent link: https://www.econbiz.de/10009359868
Many economic decisions involve a substantial amount of uncertainty, and therefore crucially depend on how individuals process probabilistic information. In this paper, we investigate the capability for probability judgment in a representative sample of the German population. Our results show...
Persistent link: https://www.econbiz.de/10004999933
I develop an equilibrium, two-sided search model of marriage with endogenous population growth to study the interaction …
Persistent link: https://www.econbiz.de/10008682247
equilibrium search model of the labor market with an endogenous number of contacts between workers and firms. Workers contact … estimated parameter values welfare is improved if unemployed workers increase their search intensity. …
Persistent link: https://www.econbiz.de/10008805621
It is commonly observed that over time and across societies, women tend to marry older men. The traditional explanation for this phenomenon is that wages increase with age and hence older men are more attractive in the marriage market. This explanation, however, involves an implicit assumption...
Persistent link: https://www.econbiz.de/10005762247
Standard search theory assumes that individuals know, with certainty, how they compare to competing searchers in terms … for search behavior. We test our hypotheses in a laboratory experiment. The first main finding is that people are … based on search outcomes. Self-confidence increases or decreases in the right direction, but is less sensitive to new …
Persistent link: https://www.econbiz.de/10005762322
We study the steady state of an overlapping generations economy where singles search for spouses. In our model economy … free parameters: the search friction and the utility share of bearing children. We choose their values to match the median …
Persistent link: https://www.econbiz.de/10005763512
information about the return to transactions with particular agents. In a search framework, signaling supports not simply a …
Persistent link: https://www.econbiz.de/10005763844
first result shows that the economy always generates the right number of jobs. However, with random search firms under …-invest in capital due to a hold-up problem. In contrast, if workers can direct their search to firms with different capital …
Persistent link: https://www.econbiz.de/10005703500
Economists traditionally tackle normative problems by computing optimal policy, i.e. the one that maximizes a social welfare function. In practice, however, a succession of marginal changes to a limited number of policy instruments are implemented, until no further improvement is feasible. I...
Persistent link: https://www.econbiz.de/10005822405