This paper analyzes the effects of moral hazard on long-run consumption or utility. Given exponential utility, it is shown that the utility of those with unobservable endowments becomes arbitrarily negative as long as any positive fraction of otherwise identical agents have observable endowments. Next, it is shown that assuming a finite number of agents results in essentially the same outcomes ...

Which inequalities among individuals are considered unjust? This paper reports the results of an experiment designed to study distributive choices dealing with arbitrarily unequal initial endowments. In a three-person distribution problem where subjects either know or do not know their endowments, we find impartial behavior to be a stable pattern. Subjects either compensate for initial inequali...

We study behavior in a moonlighting game with unequal initial endowments. In this game, predictions for second-mover behavior based on inequality aversion are in contrast to reciprocity. We find that inequality aversion explains only few observations. The comparison to a treatment with equal endowments supports the conclusion that behavior is better captured by intuitive notions of reciprocity ...

The aggregated incidence of bilateral trade costs is derived from the gravity model. Incidence is equivalent to a TFP penalty. Sectoral and national differences in TFP have sharp implications for the equilibrium pattern of production and trade in a specific factors model of production. Unskilled labor is intersectorally mobile. Skilled labor acquires sector specific skills. Productivity shocks ...

The paper explores the determinants of industry location across interwar Poland. After more than 120 years of political and economic separation, Poland was reunified at the end of 1918. In consequence, its industry faced massive structural changes: the removal of internal tariff barriers and improved infrastructure strengthened the domestic market, while foreign market relations were cut off. S...

This paper proposes an alternative explanation for the price impact of trades created by information that is carried in the order ßow. Unlike models that consider information asymmetry about the future cash ßows (or liquidation value) of the asset, the approach here postulates uncertainty about the distribution of preferences and endowments of investors. This “investor uncertainty” results in p...

In the present paper a pure exchange, general equilibrium model is considered and the equilibrium set is studied. It is shown for all total endowments and an open and dense set of preferences that if there are l ̧ 2 commodities and m ̧ 2 consumers then there exists a set of distributions of endowments with nonempty interior such that the associated economies have at least l¡1+minfl;mg equilibri...

This paper presents evidence on a national-level electricity ladder which sees countries transition toward coal and natural gas, and finally nuclear power and modern renewables such as wind power, for their electricity needs as they develop. The extent to which countries climb the electricity ladder is dependent on energy endowments. The results imply that the environmental implications of econ...