Expert performance is often evaluated in a one dimensional way by assuming that good experts have good outcomes. We examine the example of expertise in medicine and develop a model that allows for two dimensions of physician performance: Procedural decision making and skill performing...

Reforms to the Joint and Several Liability rule (JSL) are one of the most common tort reforms and have been implemented by most US states. JSL allows plaintiffs to claim full recovery from one of the defendants, even if that defendant is only partially responsible for the tort. We develop a...

Friedman (1962) argued that a free market in which schools compete based upon their reputation would lead to an efficient supply of educational services. This paper explores this issue by building a tractable model in which rational individuals go to school and accumulate skill valued in a...

We document that an increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using bonuses, commissions, or piece-rates. We find that compensation in performance-pay jobs is more closely tied to both observed (by the econometrician) and unobserved...

Friedman (1955) argued that giving parents freedom to choose schools would improve education. His argument was simple and compelling because it extended results from markets for consumer goods to education. We review the evidence, which yields surprisingly mixed results on Friedman's prediction....

Treatment for depression is complex, requiring decisions that may involve tradeoffs between exploiting treatments with the highest expected value or experimenting with treatments with higher possible payoffs. Using patient claims data, we show that among skilled doctors, using a broader...

Spence (1973) noted that individuals' choice of educational quantity—measured by years of schooling—may stem partially from a desire to signal their ability to the labor market. This paper asks if individuals' choice of educational quality—measured by college reputation—may likewise...

We provide evidence on how two important types of institutions -- dismissal barriers, and bonus pay -- affect contract enforcement behavior in a market with incomplete contracts and repeated interactions. Dismissal barriers are shown to have a strong negative impact on worker performance, and...

Economic models of contract typically assume that courts enforce obligations based on verifiable events (corresponding to the legal rule of specific performance). As a matter of law, this is not the case. This leaves open the question of optimal contract design given the available remedies used...

We examine the impact of tort reforms using U.S. birth records for 1989-2001. We make four contributions: First, we develop a model that analyzes the incentives created by specific tort reforms. Second, we assemble new data on tort reform. Third, we examine a range of outcomes. Finally, we allow...