It is well known that when an arbitrage-free financial market is incomplete or has tradable financial assets with frictions there must be multiple risk-neutral probability measures. The main motivation for the present study ...

We extend the Cole and Kehoe model (J Int Econ 41:309-330, 1996) by adding a Rubinstein bargaining game between creditors and debtor country to determine the share of debt repayment in a sovereign debt crisis. Ex-post, the ...

We prove that under mild conditions individually rational Pareto optima will exist even in the presence of non-convex preferences. We consider decision-makers (DMs) dealing with a countable flow of pay-offs or choosing ...

The Brazilian government instituted a new regulatory framework for auctioning pre-salt oil reserves to replace the previous concession regime with a profitshare bidding auction. Motivated by the new rules, we present a ...

We study a symmetric, profit share, common value auction with a twist: One (fixed) Bidder, if not winning the auction, has to enter a partnership with the winner, sharing both expenses and revenue at rate (say) 0 < λ < 1. ...

We consider an economy populated by smooth ambiguity-averse agents with complete markets of securities contingent to economic scenarios, where bankruptcy is permitted but there is a penalty for it. We show that if agents' ...

In a global games setup with imperfect commitment technology, we show that low targetsthe ones close to the optimal inflation under perfect commitmentare unattainable, leading to a trade-off between low and credible targets. ...

We study a specific class of one-dimensional monopolistic nonlinear pricing models without the single-crossing condition. In this class we show that the monopolist optimally splits quantities in two groups: low and high ...

This study investigates the relationship between debtor punishment and the development of the credit market. We empirically analyze how the level of debtor punishment relates to the credit market expansion. We find evidence ...

The study is a review of some recent papers in general equilibrium that can be viewed as efforts to better understand the recent financial crisis. We begin by proposing a new set of preferences inspired by the new decision ...