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Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between(More)
We introduce a game of complete information with multiple principals and multiple agents. Each agent makes a decision that can affect the payoffs of all principals. Each principal offers monetary transfers to each agent conditional on the action taken by the agent. We characterize pure-strategy equilibria and we provide conditions — in terms of game(More)
It is widely recognized that active media can play a role in enhancing political competition by informing voters. However, collusion between government and media can undermine this role. We extend the political accountability model to include the presence of media outlets and the possibility that the incumbent exerts influence over them. In equilibrium, the(More)
During financial disruptions, marketmakers provide liquidity by absorbing external selling pressure. They buy when the pressure is large, accumulate inventories, and sell when the pressure alleviates. This paper studies optimal dynamic liquidity provision in a theoretical market setting with large and temporary selling pressure, and order-execution delays.(More)
We propose a distinction between active waste and passive waste as determinants of the cost of public services. Active waste entails utility for the public decision maker (as in the case of bribery) whereas passive waste does not (as in the case of inefficiency due to red tape). To assess the empirical relevance of both forms of waste, we analyze purchases(More)
We review the burgeoning political economy literature on the influence of mass media on politics and policy. This survey, which covers both theory and empirics, is organized along four main themes: transparency, capture, informative coverage, and ideological bias. We distill some general lessons and identify some open questions.
What are the equilibrium features of a dynamic …nancial market in which traders care about their reputation for ability? We modify a standard sequential trading model to include traders with career concerns. We show that this market cannot be informationally e¢ cient: there is no equilibrium in which prices converge to the true value, even after an in…nite(More)
In the jungle, power and coercion govern the exchange of resources. We study a simple, stylised model of the jungle that mirrors an exchange economy. We define the notion of jungle equilibrium and demonstrate that a number of standard results of competitive markets hold in the jungle. In the typical analysis of an exchange economy, agents are involved in(More)
This paper combines dynamic social choice and strategic experimentation to study the following question: how does a society, a committee, or, more generally, a group of individuals with potentially heterogeneous preferences, experiment with new opportunities? Each voter recognizes that, during experimentation, other voters also learn about their(More)