A seller dynamically sells a divisible good to a buyer. It is common knowledge that there are gains from trade and that the gains per unit are decreasing. Payoffs are interdependent as in Akerlof's market for lemons. The seller is informed about the good's quality. The buyer makes an offer in...

This paper analyzes the implications of unobserved heterogeneity in discrete-time, discrete-choice microsimulation models. We compare the predictions coming from simple pooled probit estimates with those obtained using random effect dynamic probit models, in a dynamic microsimulation of...

Forecasting based on random intercepts models requires imputation of the individual permanent effects to the simulated individuals. When these individuals enter the simulation with a history of past outcomes this involves sampling from conditional distributions, which might be unfeasible. I...

This paper investigates the effect of potential competition on takeovers which we model as a bargaining game with alternating offers where calling an auction represents an outside option for each bidder at each stage of the game. The model aims to answer three main questions: who wins the...

We model a situation in which two countries are involved in a dispute. The dispute can end in a peaceful settlement, or it can escalate to war. If it is common knowledge that the countries are strategically rational, then the only equilibrium outcome of the model is peace. If, on the other hand,...

We examine the buyer-seller problem under different levels of commitment. The seller is informed of the quality of the good, which affects both his cost and the buyer's valuation, but the buyer is not. We characterize the allocations that can be achieved through mechanisms in which, unlike with...

In labor markets with worker and firm heterogeneity, the matching between firms and workers may be assortative, meaning that the most productive workers and firms team up. We investigate this with longitudinal population-wide matched employer-employee data from Portugal. Using dynamic panel data...

We present a theoretical model of the provision of a durable public good over an infinite horizon. In each period, there is a societal endowment of which each of n districts owns a share. This endowment can either be invested in the public good or consumed. We characterize the planner's optimal...

Aim of this work is to evaluate the overall effect of social origins on secondary school track enrolment in Italy, Germany and Netherlands, allowing for consistent cross country comparisons. PISA 2003 is employed. Track choices are assumed to depend on student's ability and social origins; since...

This paper uses longitudinal data from the BHPS, waves 1-8, to document low-income dynamics and persistence for individuals living in Britain in the 1990s. Poverty exit and re-entry rates are estimated and the resulting distribution of time spent in poverty is calculated, both in single and in...