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Jean-Paul Décamps et Stéphane Villeneuve
vol. 205, n° 105522, octobre 2022
We study a dynamic model of a firm whose shareholders learn about its profitability, face costs of external nancing and costs of holding cash. The shareholders' problem involves a notoriously challenging singular stochastic control problem with a two-dimensional degenerate diffusion process. We...
Susan Perry, Alecia Carter, Jacob Foster, Sabine Noebel et Marco Smolla
vol. 51, octobre 2022, p. 419–436
Although anthropology was the first academic discipline to investigate cultural change, many other disciplines have made noteworthy contributions to understanding what influences the adoption of new behaviors. Drawing on a broad, interdisciplinary literature covering both humans and nonhumans, we...
James K. Hammitt
n° 71, octobre 2022
Downside risk aversion (downside RA) and decreasing absolute risk aversion (DARA) are different concepts that describe preferences for which the harm from bearing risk is lessened by an increase in wealth. This note presents some intuitive explanations of the difference between the two concepts...
Doh-Shin Jeon, Yassine Lefouili et Leonardo Madio
n° 22-1361, septembre 2022, révision juillet 2025
We study a platform's incentives to delist IP-infringing products and the effects of holding the platform liable for the presence of such products on innovation and consumer welfare. For a given number of buyers, platform liability increases innovation by reducing the competitive pressure faced by...
Andrea Attar, Eloisa Campioni et Gwenaël Piaser
n° 22-1364, septembre 2022
We study competing-mechanism games, in which multiple principals contract with multiple agents. We reconsider the issue of non-existence of an equilibrium as first raised by Myerson (1982). In the context of his example, we establish the existence of a perfect Bayesian equilibrium. We clarify that...
Stefan Ambec
n° 22-1365, septembre 2022
This report uses an economic lens to analyze the Carbon Border Adjustment Mechanism (CBAM) which is currently under discussion at the European Union (EU). The CBAM, which is set to replace free allowances for specific ETS sectors after a transition period, aims to address carbon leakage and...
Tuba Tuncel
n° 22-1383, septembre 2022
After a drug obtains marketing authorization, the usage depends on the regulation of off-label pre-scriptions for unapproved indications. We investigate the impact of off-label prescription regulation on physicians’ behavior, patients’ health, treatment costs, and pharmaceutical firms’ pricing with...
Ayden Higgins et Koen Jochmans
n° 22-1366, septembre 2022, révision décembre 2024
We consider the problem of identifying the parameters of a time-homogeneous bivariate Markov chain when only one of the two variables is observable. We show that, subject to conditions that we spell out, the transition kernel and the distribution of the initial condition are uniquely recoverable (...
Bertrand Achou, Philippe De Donder, Franca Glenzer et Minjoon Lee
vol. 201, septembre 2022, p. 1–21
COVID-19 outbreaks at nursing homes during the recent pandemic have received ample media coverage and may have lasting negative impacts on individuals’ perception of nursing homes. We argue that this could have sizable and persistent implications for savings and long-term care policies. Our...
Marcel Boyer
vol. 35, n° 1, septembre 2022, p. 134–163
Prosecution of the retail gasoline price-fixing cartel in Quebec was the culmination of the largest and one of the most successful criminal investigations in the history of the Competition Bureau of Canada. In June 2008, criminal charges were brought against a number of individuals and companies...
