We assume that people have beliefs about their abilities, that these generate self-esteem, and that self-esteem is valued intrinsically. Individuals face two choices; one of which strictly dominates the other in a pecuniary sense, but necessarily involves gathering information concerning one's...

We consider tax competition in a world with tax bases exhibiting different degrees of mobility, modeled as mobile and immobile capital. An agreement among countries not to give preferential treatment to mobile capital results in an equilibrium where mobile capital is nevertheless taxed...

In this paper, we construct a simple model that illustrates a perverse effect associated with plea bargaining in which an increase in sanctions can lead to reduced deterrence. This finding is derived from the interaction of binding budgetary constraints and plea bargaining. In an environment...

This paper provides an efficiency explanation for regulation of sex, drugs and gambling (the so-called ``morality laws''). The argument is motivated by the observation that the design an enforcement of these laws often promotes discretion by the people engaging in such activities. We propose...

The economic theory of optimal punishments states that the expected penalty for a crime ought to be equal (or at least proportional) to the social harm caused by the act. The Criminal Codes in both Canada and the United States allow for criminals to be penalized to a greater degree if they are a...

This paper studies interjurisdictional competition in the fight against crime and its impact on occupational choice and the allocation of capital. In a world where capital is mobile, jurisdictions are inhabited by individuals who choose to become workers or criminals. Because the return of the...

When unemployment insurance is publicly provided, firms' layoff decisions can be distorted. Unemployment insurance reduces the cost of laying off workers, thereby encouraging layoffs and leading to more unemployment. To dampen this increase in unemployment, it has been suggested that...

Tax evasion is typically analyzed in a principal/agent framework,the government (principal) trying to provide agents with the incentives to pay their taxes. However, evading sales, excise or trade taxes requires the cooperation of at least two taxpayers. When individuals evade taxes, they face...

We investigate how discretionary investments in general and specific human capital are affected by the possibility of layoffs. After investments are made, firms may have to lay off workers, and will do so in inverse order of the profit that each worker generates. Greater skill investments,...

In a tournament, competitors may engage in undesirable activities, or 'cheating', in order to gain an advantage. Examples of such activities include the taking of steroids, plagiarism, and 'creative accounting'. This paper considers the problem of deterrence of these activities and finds that...