In Chapter 1, I consider a voting model with asymmetric information of the type analyzed in Feddersen-Pesendorfer (1997, 1998). There are two alternatives and two states of the world; voters receive private signals about the true state; conditional on the true state, all voters have the same preference over alternatives. The twist introduced by this paper is that with probability 1-[theta] a voter is sincere, meaning that he votes according to his signal. The presence of sincere voters improves information aggregation in the sense that sincere voters' private information is directly reflected in their votes. And the presence of sincere voters exacerbates the "swing voter's curse" among the sophisticated voters, as the information brought in by sincere voters enriches the information implicit in equilibrium, which pushes the sophisticated voters to put less weight on their own signals. But the exacerbation of the "swing voter's curse" can improve collective decisions, as it can alleviate the negative influence caused by the wrong votes made by sincere voters who receive wrong signals. In Chapter 2, Bo Li and I consider a standard Glosten-Milgrom sequential trading model in which some traders use both their private information and historical information when making decisions, while other traders trade randomly. We introduce a third category of traders who rely only on their private information to decide whether to trade. We find that behavioral heterogeneity (at least three types of traders) provides one explanation for the occurrence of locked/crossed markets (negative bid/ask spreads), supported by various empirical statistics, even in competitive markets that are informationally efficient. In Chapter 3, Bo Li and I consider a voluntary voting model with asymmetric information of the type analyzed in Feddersen-Pesendorfer (1999). Voters share a common state-contingent preference on alternatives but have different beliefs about the state of the world. The twist introduced by this paper is that with probability 1-[theta] a voter is sincere who always participates in voting and votes according his private signal only. We find that the presence of sincere voters exacerbates the "swing voter's curse", and the exacerbation of the "swing voter's curse" imposes a signal-contingent effect on sophisticated voters' participation.

Inspired by the recent literature on aggregation theory, this paper introduces HITS, a semiparametric model of consumer demand that allows for diversity in tastes. The strong variation of budget shares observed across income strata can arise from two economic factors: the individual income effect, and taste differences between poor and rich households. Consumer expenditure surveys that report repeated cross-sections do not permit the direct measurement of these two effects, and the paper solves this difficulty by developing a new microeconometric framework. We model consumer demand by a class of Nearly Ideal Demand Systems parameterized by a unique taste parameter. Linear heterogeneity allows GMM estimation of the structural coefficients on an aggregate time series, and the joint density of spending and tastes is recovered from cross-sections by a nonparametric procedure involving a deconvolution. We develop an asymptotic theory and demonstrate the accuracy of the algorithm by Monte Carlo and bootstrap simulations. The model is estimated on four size groups using the British Family Expenditure Survey (1968-98). We report a strong correlation between income and tastes, which explains most of the observed variation of budget shares with income. Unlike some earlier models, this new approach is consistent with both the yearly cross-sections of individual choices and the dynamics of aggregate shares.

A notion of "behavioral heterogeneity" of a finite population of households is modelled. It is shown that the higher the degree of behavioral heterogeneity the less sensitive depends the aggregate consumption expenditure ratio upon prices. As a consequence, behavioral heterogeneity implies a tendency for the Jacobian of aggregate demand to have a negative dominant diagonal.

Macroeconomics is that part of economics that focuses on economic growth and economic fluctuations. In a world under the push and pull of globalisation, it becomes crucial for the Developed Countries as well as the Developing Countries. It is necessary for some countries and companies to find the best regions to invest in while it is necessary for others to grow and compete for investment at the same time. This new book brings together an impressive array of research valuable for providing important insight into the international financial currents rippling around the world.

We evaluate the income elasticity of the aggregate budget share spent on a sub-group of commodities, in a competitive framework, by a continuum of agents having the same income, but heterogeneous behavior described by an "homothetic preferences scaling factor" having a bounded Pareto distribution in the population. If individual budget share increases globally significantly in the limit from low to large incomes, aggregate budget share is locally increasing with medium range incomes when the logarithm of the heterogeneity factor has an increasing (exponential) density with a large support. Aggregate income elasticity converges to that exponential density parameter when its support becomes infinitely large. Symmetric results hold in the decreasing case. Applications are made to market expenditures, wealth effects on portfolio choice with many risky assets, concave expenditures, that are compatible with standard (expected) utility maximization or other "behavioral" decision making processes.