Branded pharmaceutical firms use price and promotional strategy to manage public knowledge about their drugs. We propose a dynamic theory of pharmaceutical pricing and conduct an exploratory empirical analysis inspired by the theory. Our theory predicts a pattern of increasing prices and...

Concern is often voiced about the quality of American schoolteachers. This paper suggests that, while the relative quality of teachers is declining, this decline may be the result of technological changes that have raised the price of skilled workers outside teaching without affecting the...

Standard analysis of intellectual property focuses on the balance between incentives for research and the welfare costs of restraining output through monopoly pricing. We present evidence from the pharmaceutical industry that output often fails to rise after patent expirations. Patents restrict...