Researchers have made progress in understanding the role of repugnance in transactions involving the human body. Yet, often, the focus remains on exchange between individuals and how they mentally cope (or not) with repugnance. But these exchanges also entail a “vertical” dimension in which organizational and state actors both directly manage repugnance and also limit the repugnance management tools available to the marketplace. Analyzing repugnance and its management as an organizational and regulatory problem, in addition to an individual one, suggests that a single, harmonized system of exchange in bodily goods is unlikely to emerge with the passage of time.

We investigate in a sample of 53 emerging markets over 1980-2014 whether countries with open capital accounts are necessarily at the mercy of global events, or are able to take policy actions when receiving inflows to mitigate the impact of a subsequent reversal. Our analysis suggests that, while changes in global conditions have an important bearing on crisis susceptibility, countries that allow the buildup of macroeconomic and financial vulnerabilities during boom times, and which receive mostly debt flows, are significantly more likely to see capital inflow surge episodes end in a financial crisis.

We study a variant of the one-sector neoclassical growth model of Diamond in which capital investment must be credit financed, and an adverse selection problem appears in loan markets. The result is that the unfettered operation of credit markets leads to a one-dimensional indeterminacy of equilibrium. Many equilibria display economic fluctuations which do not vanish asymptotically; such equilibria are characterized by transitions between a Walrasian regime in which the adverse selection problem does not matter, and a regime of credit rationing in which it does. Moreover, for some configurations of parameters, all equilibria display such transitions for two reasons. One, the banking system imposes ceilings on credit when the economy expands and floors when it contracts because the quality of public information about the applicant pool of potential borrowers is negatively correlated with the demand for credit. Two, depositors believe that returns on bank deposits will be low (or high): these beliefs lead them to transfer savings out of (into) the banking system and into less (more) productive uses. The associated disintermediation (or its opposite) causes banks to contract (expand) credit. The result is a set of equilibrium

Most analyses treat global warning as a single-agent problem. The present study presents the Regional Integrated model of Climate and the Economy (RICE) model. By disaggregating into countries, the model analyzes different national strategies in climate-change policy: pure market solutions, efficient cooperative outcomes, and noncooperative equilibria. This study finds that cooperative policies show much higher levels of emissions reductions than do noncooperative strategies; that there are substantial differences in the levels of controls in both the cooperative and the noncooperative policies among different countries; and that high-income countries may be the major losers from cooperation.

In our paper with Daigee Shaw (Mendelsohn et al., 1994), henceforth MNS, we developed a new approach to measuring the impact of global warming on agriculture. We call this approach because it relies upon standard rent theory as a way of identifying the impact of changes on net economic welfare. We compared the Ricardian approach with the traditional production-function approach, which uses agricultural production functions but has great difficulty identifying all the other adjustments that farmers make in response to changing external conditions. The Ricardian approach is particularly well-suited to a tremendously heterogeneous sector because it can rely upon reduced-form estimation and does not require the impossible task of constructing structural models of hundreds of crops in thousands of locations. Estimating the model using cross-sectional data on climate, farm-land prices, and other economic and geophysical data for almost 3,000 counties in the United States, the Ricardian approach shows a significantly lower estimated impact of global warming than the traditional productionfunction approach. Indeed, our preferred statistical approach showed modest benefits of climate change. In his comment on MNS in this issue of the Review, William R. Cline (1996) raises three concerns. First, he notes that the analysis assumes that output prices remain constant. Second, he asserts that the analysis assumes that the supply of water for irrigation is perfectly elastic. Third, he calls for testing the results of the model on alternative climate scenarios from general circulation models (GCM's). His first and third points are useful additions, while the second is incorrect. Our Ricardian approach assumes that the existing pattern of agricultural land rents and land prices reflects the long-run equilibrium economic effect of climate and other geophysical and economic variables. Standard economic reasoning shows that, by calculating the estimated effects of perturbing the climatic variables, we can project the impact of climate change on economic welfare. We do so in a partial-equilibrium approach which assumes that output prices are invariant to the climate, and Cline is correct to point out that this might lead to biased estimates because the partialequilibrium estimates tend to underestimate damages and overestimate benefits. In fact, the bias is small given standard parameters for agricultural demand and supply functions. We illustrate this point using linear supply and demand functions for agricultural crops. Let demand be given by Qd = ao - a1P while supply is Q. = Po + PI P, where Q and P are output and price and ai and [,i are parameters. In equilibrium at the old climate, market outcomes are Qo and PO. Now suppose that global warming contracts supply so that

The optimal allocation of resources in complex environments—like allocation of dynamic wireless spectrum, cloud computing services, and Internet advertising—is computationally challenging even given the true preferences of the participants. In the theory and practice of optimization in complex environments, a wide variety of special and general purpose algorithms have been developed; these algorithms produce outcomes that are satisfactory but not generally optimal or incentive compatible. This paper develops a very simple approach for converting any, potentially non-optimal, algorithm for optimization given the true participant preferences, into a Bayesian incentive compatible mechanism that weakly improves social welfare and revenue.

Following FCC pressure to end bill shock, cellular carriers now alert customers when they exceed usage allowances. We estimate a model of plan choice, usage, and learning using a 2002–2004 panel of cellular bills. Accounting for firm price adjustment, we predict that implementing alerts in 2002–2004 would have lowered average annual consumer welfare by $33. We show that consumers are inattentive to past usage, meaning that bill-shock alerts are informative. Additionally, our estimates imply that consumers are overconfident, underestimating the variance of future calling. Overconfidence costs consumers $76 annually at 2002–2004 prices. Absent overconfidence, alerts would have little to no effect.

We conduct the first empirical investigation of common-pool resource users' dynamic and strategic behavior at the micro level using real-world data. Fishermen's strategies in a fully dynamic game account for latent resource dynamics and other players' actions, revealing the profit structure of the fishery. We compare the fishermen's actual and socially optimal exploitation paths under a time-specific vessel allocation policy and find a sizable dynamic externality. Individual fishermen respond to other users by exerting effort above the optimal level early in the season. Congestion is costly instantaneously but is beneficial in the long run because it partially offsets dynamic inefficiencies.