I consider the efficiency of liability rules when courts obtain imperfect information about precautionary behavior. I ask what tort rules are consistent with socially efficient precautions, what informational requirements the evidence about the parties' behavior must satisfy, what decision rules...

We study learning in perfect competition. A representative price-taking firm sells a good whose quality is unknown to some buyers. The uninformed buyers use the price to infer information about quality. Even though the firm is a price-taker, information is disseminated though the price. It is...

We analyze the complementarity between legal incentives (the threat of being held liable for damages) and normative incentives (the fear of social disapproval or stigma) in situations where instances of misbehavior are not perfectly observable. There may be multiple equilibria within a given...

Despite a large literature documenting that the efficacy of monetary policy depends on how inflation expectations are anchored, many monetary policy models assume: (1) the inflation target of moentary policy is constant; and, (2) the inflation target is known by all economic agents. This paper...

For many environmental problems regulators are uncertain about both the costs of abatement and the stock-related damages. For example, governments have imperfect information about damages caused by greenhouse gas stocks, and also about the costs of abating greenhouse gas emissions. They acquire...

In this paper, we propose use of the influence diagram for stock portfolio selection. We use an algorithm that applies the mutual information as the metric to guide the refinement of the influence diagram. We applied the algorithm to the conceptual refinement of the influence diagram. We tested...