NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Alexander Wagner

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Working Papers

December 2012Solomonic Separation: Risk Decisions as Productivity Indicators
with Nolan Miller, Richard J. Zeckhauser: w18634
A principal provides budgets to agents (e.g., divisions of a firm or the principal's children) whose expenditures provide her benefits, either materially or because of altruism. Only agents know their potential to generate benefits. We prove that if the more "productive" agents are also more risk-tolerant (as holds in the sample of individuals we surveyed), the principal can screen agents and bolster target efficiency by offering a choice between a nonrandom budget and a two-outcome risky budget. When, at very low allocations, the ratio of the more risk-averse type's marginal utility to that of the other type is unbounded above (e.g., as with CRRA), the first-best is approached. -- A biblical opening enlivens the analysis.
June 2003Choosing (and reneging on) exchange rate regimes
with Alberto Alesina: w9809
We use data on announced and actual exchange rate arrangements to ask which countries follow de facto regimes different from their de iure ones, that is, do not do what they say. Our results suggest that countries with poor institutional quality have difficulty in maintaining pegging and abandon it more often. In contrast, countries with relatively good institutions display fear of floating, i.e. they manage more than announced, perhaps to signal their differences from those countries incapable of maintaining promises of monetary stability.

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