Publications [#237851] of Attila Ambrus

Journal Articles

1. Ambrus, A; Egorov, G, Comment on "Commitment vs. Flexibility", Econometrica, vol. 81 no. 5 (January, 2013), pp. 2113-2124, The Econometric Society, ISSN 0012-9682 [Gateway.cgi], [doi]
   (last updated on 2023/03/25)

   Abstract:
   This comment corrects two results in the 2006 Econometrica paper by Amador, Werning, and Angeletos (AWA), that features a model in which individuals face a trade-off between flexibility and commitment. First, in contrast to Proposition 1 in AWA, we show that money-burning can be part of the ex ante optimal contract when there are two states. Second, in contrast to Proposition 2 in AWA, we show that money-burning can be imposed at the top (in the highest liquidity shock state), even when there is a continuum of states. We provide corrected versions of the above results. © 2013 The Econometric Society.