The paper investigates the role of the Intertemporal Elasticity of Substitution () in determining the equity premium. This is done in an overlapping generations economy populated by agents that live for 2 periods and maximize a Kihlstrom-Mirman expected utility function. The equity premium...

The standard power utility function is widely used to explain asset prices. It assumes that the coefficient of relative risk aversion is the inverse of the elasticity of substitution. Here I use the Kihlstrom and Mirman (1974) expected utility approach to relax this assumption. I use time...

Comparative static properties of the solution to an optimal nonlinear income tax problem are provided for a model in which the government both designs a redistributive income tax schedule and provides a public input into a nonlinear production process. These assumptions imply that wage rates are...

This chapter provides a survey of much of the recent theoretical analysis of products liability. We start by describing an idealized model and providing the specific economic assumptions which underpin it. Later sections examine the effects of relaxing these assumptions, which has been the focus...

We draw together concepts from political science, law, and economics to model discretionary actions by agents in a weak hierarchical system, wherein agents at a higher level cannot directly discipline those at a lower level. In particular, we model the decision by an appeals court judge to...

The impacts of changing the number of individuals of a particular skill level on the solutions to two versions of the finite population optimal nonlinear income tax problem are investigated. In one version, preferences are quasilinear-in-leisure. For this version, it is shown that it is possible...

We examine the effect of "split-award" statutes (wherein the State takes a share of a punitive damages award) on equilibrium settlements and the incentives to go to trial. We find that split-award statutes simultaneously lower settlement amounts and the likelihood of trial, as both parties act...

In this paper we examine a dynamic model of the process by which multiple related lawsuits may be filed and combined; we also examine actions a defendant may employ that may disrupt the formation of a joint suit. Our initial model involves two potential plaintiffs, with private information about...

In this article, the joint use of an income tax and public provision of education as instruments to achieve the government's distributional objectives are considered. Individuals differ in innate labour productivity and in aptitude to acquire skills through education. Actual labour productivity...

This paper analyzes a simple and tractable model of occupational choice in the presence of credit market imperfections. We examine the relative roles of parameters governing technology and transaction costs, and history in terms of the initial wealth distribution in determinig the long term...