(with Rajiv Sethi), Journal of Public Economic Theory 12, 399-406, 2010.
Summary. Elite educational institutions have turned to criteria that meet diversity goals without being formally contingent on applicant identity. Under weak and generic conditions, such color-blind affirmative action policies must be nonmonotone in student test scores.
(with Garance Genicot), Journal of Development Economics 79, 398-412, 2006.
Summary. In a credit market with enforcement constraints, we study the effects of a change in the outside options of a potential defaulter on the terms of the credit contract, as well as on borrower payoffs. The results crucially depend on the allocation of “bargaining power” between the borrower and the lender. We prove that there is a crucial threshold of relative weights such that if the borrower has power that exceeds this threshold, her expected utility must go up whenever her outside options come down. But if the borrower has less power than this threshold, her expected payoff must come down with her outside options. These disparate findings within a single model permit us to interpret existing literature on credit markets in a unified way.
International Journal of Game Theory 18, 185-187, 1989.
Summary. A problem with the concept of the core is that it does not explicitly capture the credibility of blocking coalitions, This notion is defined, and the concept of a modified core introduced, consisting of allocations not blocked by any credible coalition. The core and modified core are then shown to be identical. The concept of credibility is thus implicit in the definition of the core.