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College Admissions and the Stability of Marriage
Gale and Shapley focused on a common problem faced by colleges based on their usual admissions procedure—namely, how to admit the ideal number of best-qualified applicants based on a specific quota without knowing precisely how many admitted applicants will accept. Expand
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Optimal Financial Crises
Empirical evidence suggests that banking panics are a natural outgrowth of the business cycle. In other words panics are not simply the result of "sunspots" or self-fulfilling prophecies. PanicsExpand
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Incentive-Compatible Debt Contracts: The One-Period Problem (Revised version now published in Review of Economic Studies, 1985).)
In a simple model of borrowing and lending with asymmetric information we show that the optimal, incentive-compatible debt contract is the standard debt contract. The second-best level of investmentExpand
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Bubbles and Crises
In recent financial crises a bubble, in which asset prices rise, is followed by a collapse and widespread default. Bubbles are caused by agency relationships in the banking sector. Investors useExpand
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Limited market participation and volatility of asset prices
Traditional asset-pricing theories assume complete market participation, despite considerable empirical evidence that most investors participate in a limited number of markets. The authors show thatExpand
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Understanding Financial Crises
What causes a financial crisis? Can financial crises be anticipated or even avoided? What can be done to lessen their impact? Should governments and international institutions intervene? Or shouldExpand
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Consistency and heterogeneity of individual behavior under uncertainty
By using graphical representations of simple portfolio choice problems, we generate a very rich dataset to study behavior under uncertainty at the level of the individual subject. We test the dataExpand
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Financial Markets, Intermediaries, and Intertemporal Smoothing
In an overlapping generations economy with (incomplete) financial markets but no intermediaries, there is underinvestment in safe assets. In an economy with intermediaries and no financial markets,Expand
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Optimal Security Design
How should new securities be designed? Traditional theories have little to say on this: the literature on capital structure and general equilibrium theories with incomplete markets take theExpand
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Financial innovation and risk sharing
Part 1 Financial innovation - an overview: history and institutions industrial organization approaches to innovation an outline of our theory other approaches and future research. Part 2 Models ofExpand
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