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We consider the problem of user agents selecting processor agents to processor tasks. We assume that processor agents are drawn from two populations: high and low-performing processors with di#erent averages but similar variance in performance. For selecting a processor, a user agent queries other user agents for their high/low rating of di#erent processors. We assume that a known percentage of "liar" users, who give inverse estimates of processors. We develop a trust mechanism that determines the number of users to query given a target guarantee threshold likelihood of choosing high-performance processors in the face of such "noisy" reputation mechanisms. We evaluate the robustness of this reputation-based trusting mechanism over varying environmental parameters like percentage of liars, performance difference and variances for high and low-performing agents, learning rates, etc.

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A[I]f you observe, people always live forever when there is any annuity to be paid them An annuity is a very serious business; it comes over and over every year, and there is no getting rid of it.@ Jane Austen (1962: 10-11) As baby boomers near retirement, policy analysts have begun to ask how this cohort will handle the process of drawing down its retirement saving. One mechanism for doing this is the life annuity, an insurance product that pays out a periodic sum for life in exchange for a premium charge. The main appeal of the life annuity is that it offers retirees the opportunity to insure against the risk of outliving their assets by pooling mortality experience across the group of annuity purchasers. The market for individual life annuities in the United States has historically been small. Previous researchers working in the context of the standard life cycle model, notably Benjamin Friedman and Warshawsky (1988, 1990), have argued that it is puzzling that so few people avail themselves of the private market for annuities. This market has recently begun to attract substantial attention from those considering proposals to replace part of Social Security with

The language of game theory—coalitions, payo¤s, markets, votes— suggests that it is not a branch of abstract mathematics; that it is motivated by and related to the world around us; and that it should be able to

Supply chain interactions have huge economic importance, yet these interactions are managed inefficiently. One of the major sources of inefficiency in supply-chain management is information asymmetry; i.e., information that is available to one or more organizations in the chain (e.g., manufacturer, retailer) is not available to others. There are several causes of information asymmetry, among them fear that a powerful buyer or supplier will take advantage of private information, that information will leak to a competitor, etc. We propose Secure Supply-Chain Collaboration (SSCC) protocols that enable supply-chain partners to cooperatively achieve desired system-wide goals without revealing the private information of any of the parties, even though the jointly-computed decisions require the information of all the parties. Secure supply-chain collaboration has the potential to improve supply-chain management practice, and, by removing one major inefficiency therein, improve productivity. We present specific SSCC protocols for two types of supply-chain interactions: Capacity allocation, and e-auctions. In the course of doing so, we design techniques that are of independent interest, and are likely to be useful in the design of future SSCC protocols.

Under the educational sorting hypothesis,an environment in which some individuals are constrained from entering university will be characterized by increased pooling at the highschool graduation level, as compared toanenvironmentwithgreateruniversityaccess. Thisresultsbecausesomepotentialhighschooldrop-outs and university enroleeschoose the high schoolgraduate designationinorder to take advantage ofhigh abilityindividualswhoareconstrainedfromentering university. Thisisinstarkcontrasttohumancapital theorywhichpredictshigheruniversityenrolment, butidenticalhighschooldrop{outratesinregionswith greateruniversityaccess.Itestthecontradictoryhighschool drop-outpredictionsofthehumancapitaland signalingmodelsusingNLSYM and NLSYW educationdata from the late 1960sand early1970s. I find that labor markets thatcontainuniversitieshavehigherhighschooldrop{outrates. Thisresultisconsistent withasignalingmodel, andinconsistentwithapurehumancapitalmodel.

We provide strong evidence of advantageous selection in the Medigap insurance market, and analyze its sources. Using Medicare Current Beneficiary Survey (MCBS) data, we find that, conditional on controls for the price of Medigap, medical expenditures for senior citizens with Medigap coverage are, on average, about $4,000 less than for those without. But, if we condition on health, expenditures for seniors on Medigap are about $2,000 more. These two findings can only be reconciled if those with less health expenditure risk are more likely to purchase Medigap, implying advantageous selection. By combining the MCBS and the Health and Retirement Study (HRS), we investigate the sources of this advantageous selection. These include income, education, longevity expectations and financial planing horizons, as well as cognitive ability. Once we condition on all these factors, seniors with higher expected medical expenditure are indeed more likely to purchase Medigap. Surprisingly, risk preferences do not appear to be a source of advantageous selection. But cognitive ability emerges as a particularly important factor, consistent with a view that many senior citizens have difficulty understanding Medicare and Medigap rules.

We provide a pricing theory for emerging asset classes, like emerging markets, that are not yet mature enough to be attractive to the general public. We show how leverage cycles can cause contagion, flight to collateral, and issuance rationing in a frequently recurring phase we call the anxious economy. Our model provides an explanation for the volatile access of emerging economies to international financial markets, and for three stylized facts we identify in emerging markets and high yield data since the late 1990s. Our analytical framework is a general equilibrium model with heterogeneous agents, incomplete markets, and endogenous collateral, plus an extension encompassing adverse selection. (JEL D53, G12, G14, G15) Since the 1990s, emerging markets have become increasingly integrated into global financial markets, becoming an asset class. Contrary to what was widely predicted by policymakers and economic theorists, however, these changes have not translated into better consumption smoothing opportunities for emerging economies. Their access to international markets has turned out to be very volatile, with frequent periods of market closures. Even worse, as we will show, emerging