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Abhit Bhandari

February 2021

Economic growth requires confidence in the state's ability to enforce secure exchange. But when states selectively enforce rule of law, political considerations can moderate the trust that buyers have in sellers. I argue that political connections produce moral hazard in exchange because they...

Gladys Barragan, Maxime Cauchoix, Anne Regnier, Marie Bourjade, Astrid Hopfensitz, and Alexis Chaine

vol. 288, n. 1944, February 2021

Cooperation plays a key role in the development of advanced societies and can be stabilized through shared genes (kinship) or reciprocation. In humans, cooperation among kin occurs more readily than cooperation among non-kin. In many organisms, cooperation can shift with age (e.g. helpers at the...

Andrew Rhodes, Makoto Watanabe, and Jidong Zhou

vol. 129, n. 2, February 2021, p. 421–464

This paper develops a new framework for studying multiproduct intermediaries when consumers demand multiple products and face search frictions. We show that a multiproduct intermediary is profitable even when it does not improve consumer search efficiency. The intermediary optimally stocks high-...

Laurent Miclo, and Pierre Patie

vol. 280, n. 3, February 2021, 54 pages

Interweaving relations are introduced and studied here in a general Markovian setting as a strengthening of usual intertwining relations between semigroups, obtained by adding a randomized delay feature. They provide a new classification scheme of the set of Markovian semigroups which enables to...

Stefan Ambec, and Claude Crampes

vol. 94, n. 105074, February 2021

The presence of consumers able to respond to changes in wholesale electricity prices facilitates the penetration of renewable intermittent sources of energy such as wind or sun power. We investigate how adapting demand to intermittent electricity supply by making consumers price-responsive - thanks...

Patrick Fève, Pablo Garcia Sanchez, Alban Moura, and Olivier Pierrard

vol. 132, February 2021

We augment a simple Real Business Cycle model with financial intermediaries that may default on their liabilities and a financial friction generating social costs of default. We provide a closed-form solution for the general equilibrium of the economy under specific assumptions, allowing for...

Pierre Dubois, Yassine Lefouili, and Stéphane Straub

vol. 132, n. 103655, February 2021

We use data from seven low and middle income countries with diverse drug procurement systems to assess the eect of centralized procurement on drug prices, and provide a theoretical mechanism that explains this eect. Our empirical analysis is based on exhaustive data on drug sales quantities and...

Helia Costa, and Linda Veiga

vol. 94, n. 105055, February 2021

Investment in wind power has grown remarkably in the past decades in Portugal. Although economic development is an argument for investment incentive policies, little evidence exists as to their net impact on local-level unemployment. Using data for all 278 Portuguese mainland municipalities for the...

Mathias Reynaert, and James M. Sallee

vol. 13, n. 1, February 2021, pp. 372–412

Firms sometimes comply with externality-correcting policies by gaming the measure that determines policy. This harms buyers by eroding information, but it benefits them when cost savings are passed through into prices. We develop a model that highlights this tension and use it to analyze gaming of...

Helmuth Cremer, and Chiara Canta

Toronto, vol. 54, n. 1, February 2021, pp. 259–283