We examine how incumbents respond to the threat of entry by competitors (as distinct from how they respond to actual entry). We look specifically at passenger airlines, using the evolution of Southwest Airlines' route network to identify particular routes where the probability of future entry...

Using data on the prices of capital goods, this paper shows that much of the benefit of investment tax incentives does not go to investing firms but rather to capital suppliers through higher prices. A 10 percent investment tax credit increases equipment prices 3.5-7.0 percent. This lasts...

We test whether textbook consumers are forward-looking, using a large new data set on textbooks sold in college bookstores during the ten semesters from 1997 to 2001. The data strongly support the hypothesis that students are forward-looking with low short-run discount rates and that they behave...

The rapid rise in sales over the Internet and the fact that most Internet buyers pay no sales tax has ignited a considerable debate over taxes and the Internet. This paper uses new data on the purchase decisions of approximately 25,000 online users to examine the effect of local sales taxes on...