Analyzes empirically the effect of audit rates and certain other factors on the filing of federal individual income tax returns and the self-reporting of taxes due. Estimates that self-reported taxes in 1986 would have been greater by approximately fifteen billion dollars had the federal audit...

Provides empirical evidence on the relationship between compliance with the federal income tax and auditing by the IRS. Combines a cross-section data set related to 1969 individual returns assembled by the IRS with data taken from the Annual Report of the Commissioner of Internal Revenue.

We study the effect of legal constraints in an environment in which agents face demand shocks they would like to smooth, but also have weakness of will: agents' long and short run preferences are misaligned. Some agents are sophisticated -- they know they will make inconsistent intertemporal...

We consider how the state should regulate the consumption of pecuniary private benefits of control by controlling shareholders. These benefits have efficient aspects: they compensate the controlling shareholder for monitoring managers and for investing effort to create and implement projects....

Contract interpretation is an important subject for lawyers but there are few rigorous economic analyses. We use a formal model to derive the interpretive rule that an “ideal” legal enforcer would adopt. Commercial parties make contracts to maximize gains from trade. Our enforcer is ideal,...

The separation of control and ownership – the ability of a small group effectively to control a company though holding a minority of its cash flow rights – is common throughout the world, but also is commonly decried. The control group, it is thought, will use its position to consume...

We study the effect of legal constraints in an environment in which agents face demand shocks they would like to smooth, but the agents also have weakness of will: their long and short run preferences are misaligned. Some agents are sophisticated - they know they will make inconsistent...

It is widely agreed that capital cost reduction should be among the goals that a business bankruptcy law should pursue. This Essay argues that capital cost reduction should be the only goal, and that a bankruptcy system seriously committed to this goal would be both smaller and less centralized...