This paper extends the analysis of the structure of judicial hierarchies to environments in which litigants may have asymmetric information about the merits of the case. We identify equilibria in which the error rate is zero. In each equilibrium, at least one of the inferior courts does not...

Although institutions rooted in the folk theorem can support self-enforcing exchange in a wide variety of contexts, their potential to create cooperation is not limitless. In particular, the folk theorem may break down when some agents are physically stronger than others. I demonstrate this in...

Frey [2001] and others propose subjecting governments to competition within their jurisdiction, but classical liberals argue that having competing law enforcers cannot work. This article describes a hybrid system that relies on markets but has one law enforcement agency per region, with profit...

Independent rent extraction by competing public officials produces a level of bribery that is too high both from the viewpoint of corrupt administrations and from the viewpoint of social welfare. Nevertheless, governments in many developing countries do not curb the harmful lack of coordination...

I analyze the postelectoral coalition formation process in a two-dimensional political environment. The two dimensions are the degree of a proportional tax rate and the degree of a group-specific public good. Parties are office-motivated and care instrumentally about policy. I analyze when...

Contemporary economic liberalism comes in two forms: a substantive version, which defines the scope and extent of economic policy, and a procedural version, which draws on citizens' preferences. Whereas the recent reconception of economic liberalism based on social-contract theory considers the...

Our model presents an underexamined element of policy reform and institutional quality, showing how the characteristics of the political system may render citizens unable to properly reward politicians who implement new projects, thus favouring politicians who secure the status quo, albeit...

Two theorems are presented that show the following: Assume that preferences are influenced by past consumption. If and only if preferences are adaptive, it is the case that all improvement sequences are acyclic and thus can be a basis for doing welfare economics. It is further argued that...

The measurement of preferences is an ongoing challenge for economists. New insights can be won by relying on reported subjective well-being in addition to observed behaviour. Empirical estimates of well-being functions, based on a sample of 5500 Swiss residents, find that unemployed persons are...

We investigate the incentives of environmental liability law to improve pollution control technology. It is shown that equilibrium choice of abatement technology and of the level of pollution reduction is socially optimal under very restrictive conditions. However, technological spillovers...