When consumers are forward-looking with respect to their demand for a habit-forming good, traditional measures of price elasticity are misleading.  In particular, such measures will underestimate sensitivity to long-run shifts - and therefore underestimate the potential effect of policy...

A recent surge of literature on tax salience has included studies that use tax type as a proxy for salience.  The relationship between tax type and salience is not always apparent, however, nor is salience the only feature by which taxes differ.  In fact, taxes' behaviour over time suggests an...

Traditionally, the scholarly journal market operates so that research institutions are charged high prices and the wider public is often excluded altogether, while authors can usually publish for free and commercial publishers enjoy high profits.  Two forms of open access regulation can...

This paper investigates the interaction between corruption and infrastructure policy reforms.  I construct a simple model to illustrate how both an incerase in regulatory autonomy and privatisation may influence the effect of corruption.  This interaction is then analysed empirically using a...

The regulator of a natural monopoly that sets a two-part tariff and whose marginal cost is stochastic will generally want the price to vary less than marginal cost when the lump-sum charge in the tariff is fixed. A trade-off exists between efficient pricing and an optimal allocation of risk....

The paper develops a model of decentralized metering decisions when selective metering is socially optimal. Households choose between two-part tariffs. Decentralization achieves social efficiency when the regulator, who knows household characteristics, gives household-specific compensation (via...

In this paper we study the delegation of a production process in a three-tier hierarchy. The principal contracts directly only with the supplier that produces the first input leaving him in charge of the contract for the production of the second input. We allow the principal to costlessly...

The paper shows how commodity taxes can provide insurance to consumers when the producer price is volatile. Specific and ad valorem taxes have differing roles. The optimal specific tax is positive when demand has some elasticity. The optimal ad valorem rate is zero when demand is unit-elastic,...

In the 1980s. India experimented with deregulation in industry and trade. Manufacturing output accelerated but employment declined. The latter has raised doubt regarding desirability of policy reforms.This paper provides an explanation of the employment decline that sheds light on the manner in...

Negotiations often take long a time even if a delay in the agreement is inefficient. One typical explanation is the existence of private information of at least one party; the time is then a discriminating instrument. The paper starts by pointing out that this result does not hold once the...