Documento de Trabajo

Revealing Bargaining Power through Actual Wholesale Prices

In vertical relationships in which manufacturers and retailers bargain over a volatile surplus, negotiated wholesale prices determine both payoffs and risk-exposure. We use actual wholesale prices to study the profit-sharing and risk-sharing behavior of manufacturers and retailers in the co.ee industry in Chile. We find that small manufacturers are able to earn a sizable fraction

The African Financial Development and Financial Inclusion Gaps

This paper investigates the African financial development and financial inclusion gaps relative to other peer developing countries.  Using a set of variables related to financial development and inclusion, we first estimate the gaps between African countries and other developing countries with similar degrees of economic development. Then, we explore the determinants of financial development and

Assessing the extent of democratic failures. A 99%-Condorcet’s Jury Theorem

This This paper determines the probability a large electorate will take take the correct decision under qualified majority rules. The model allows the competence of each elector to vary with the size of the electorate, thus the results represent a connection between «naive» and «strategic» Condorcet`s Jury Theorems.
JEL Classification: D72 · H11 · P16.

Trust in Cohesive Communities

This paper studies which social networks maximize trust and cooperation when agreements are implicitly enforced. We study a repeated trust game in which trading opportunities arise exogenously and the social network determines the information transmission technology. We show that cohesive communities, modeled as social networks of complete components, emerge as the optimal community design. Cohesive

Banking Competition and Economic Stability

We consider a two-period model of a banking system to explore the effects of competition on the stability and efficiency of economic activity. In the model, competing banks lend to entrepreneurs. After entrepreneurs receive the loans for their projects, there is a probability of a shock. The shock implies that a fraction of firms will

Reputational Concerns in Directed Search Markets with Adverse Selection

This paper introduces reputation building in directed search with adverse selection. Seller types randomly determine the quality of the asset they hold, where both a seller`s type and asset quality are private information. When an exchange occurs, the quality of the asset that a seller holds is revealed and the market updates its belief about

Persistent Inequality, Corruption, and Factor Productivity

I build a model with bequests, financial frictions and corrupt bureaucrats to explain the link between corruption and inequality and its effects on productivity. Because of collateral requirements, profits are determined by wealth. If individual wealth is not publicly observed, taxation is regressive under corruption. When wealth inequality is high, corruption is more prevalent, creating

Financial Openness, Market Structure and Private Credit: An Empirical Investigation

This paper empirically examines whether the effect of financial openness on private credit depends on the market structure of the banking sector prior liberalization. We find that financial openness has a positive effect on private credit in countries characterized by a highly competitive banking sector. However, this effect vanishes and even becomes negative in countries

Minimum Coverage Regulation in Insurance Markets

We study the consequences of imposing a minimum coverage in an insurance market where enrollment is mandatory and agents have private information on their true risk type. If the regulation is not too stringent, the equilibrium is separating in which a single firm monopolizes the high risks while the rest attract the low risks, all

Efficiency in Games with Markovian Private Information

We study repeated Bayesian n-player games in which the players` privately known types evolve according an irreducible Markov chain. Our main result shows that, with communication, any Pareto-efficient payoff vector above a stationary minmax value can be approximated arbitrarily closely in a perfect Bayesian equilibrium as the discount factor goes to one. As an intermediate

EPL and capital-labor ratios

Employment protection (EPL) has a well known negative impact on labor flows as well as an ambiguous but often negative effect on employment. In contrast, its impact on capital accumulation and capital-labor ratio is less well understood. The available empirical evidence suggests a hump-shaped relation between capital-labor ratios and EPL: positive at very low levels

A Spatial Model of Voting with Endogenous Proposals: Theory and Evidence from Chilean Senate

Proposers strategically formulate legislative bills before voting takes place. However, spatial voting models that estimate legislator’s ideological preferences do not explicitly consider this fact. In our model, proposers determine the ideology and valence of legislative bills to maximize their objective functions. Approaching to the median legislator ideology and increasing costly valence increases the passing probability,