Decisions about intervention can be understood as decisions about tolerance, because an act of tolerance is an act of nonintervention, and, conversely, an act of intervention can be understood as an act of intolerance. But acts of tolerance, typically made under conditions of epistemic...

After discussing some categories and modalities of a designed system change the paper turns to the example of the recent Russian company legislation. The design of two ambitious new company codes for large and small corporations implied a massive transformation of both the underlying economic...

From a game-theoretic point of view, fraudulent accounting to embellish the financial status of a firm and the use of drugs to enhance performance in sports are very similar. We study the replicator dynamics of such games. We allow for heterogeneous populations, such as highly talented versus...

Although competition law and intellectual property have overlapping economic rationales, they frequently conflict. One area of conflict is vertical leveraging. This paper analyzes recent legislation and court decisions dealing with vertical leveraging. The main conclusion is that two policy...

The paper examines some of the drawbacks of the existing banking system, from the standpoint of both the industry and the taxpayer, and the considers the possible role that mutual funds might play in an alternative banking system. In particular, the characteristics of money market funds are...

We present a game-theoretic model of political discourse that explores how strategic incentives to make potentially persuasive arguments vary across different informational contexts. We show that political sophistication of the listeners fundamentally affects the speakers' incentives to make...

We consider a principal-multiagent framework with adverse selection when contracting is possible ex ante. However, enforcement of contracts is imperfect, which results in inefficiencies. We study how group contracting may or may not mitigate those inefficiencies.

I examine the case where fulfillment of a contractual commitment is only imperfectly verifiable and ask whether the court should then tell the truth regarding the action in dispute. I show that truth seeking does not maximize the expected surplus from contractual relationships. From the parties'...

This paper studies the constrained efficient intergovernmental transfer contract between the central government and the states in a federal economy. We consider an environment with moral hazard, incomplete enforceability, and date-0 negotiation costs. The interaction of moral hazard and...

An agent who is near-rational in the sense of Akerlof and Yellen makes a slight mistake which has only a first-order effect ohnhis own utility. If he is constrained by a participation constraint on another party, as in a principal-agent relationship, the result only holds when the agent is...