Experimental choices between delayed rewards are claimed to provide support for a model of preferences referred to variously as "quasi-hyperbolic," "hyperbolic," and "‚-‰." This paper shows that the experimental results do not differentiate quasi-hyperbolic discounting from exponential...

William Baumol and William Bowen's work on the economics of the arts in the 1960's laid the foundation for a new field and provided arguments for public support. This paper discusses influences on their work, the nature of their analysis, and their impact on the development of the economics of...

Studies in psychology and behavioral economics have found that decision-making is replete with cognitive biases. Using stylized examples of time inconsistency, regret, and overconfidence, this paper illustrates possible interactions among them. As is generally true in second-best environments,...

Since only the residents of a single jurisdiction are affected by local consumption externalities, local regulation might be expected to be inefficient. Yet when production has increasing returns to scale, one jurisdiction's choice of regulatory standard affects the prices and availability of...

This paper studies federalism in a "menu auction" or common agency setting where influence costs depend on the heterogeneity of preferences over allowed policies. Though localized provision and uniformity constraints may preclude efficient policies, they reduce influence costs and may enhance...

Combining rent-seeking and menu auction models allows the study of efficiency in a political economy where lobbying creates rents that politicians expend resources to obtain. Policy choices, lobbying, and rent-seeking are determined endogenously. When all interests lobby, equilibrium local...