The U.S. Food and Drug Administration (FDA) balances risks and benefits before approving pharmaceuticals, as rationality would require. But powerful behavioral biases that lead to the mishandling of uncertainty also influence its approval process. The FDA places inordinate emphasis on errors of...

Recommender and reputation systems seek to inform potential customers by securing current consumers' feedback about products and sellers. This paper proposes a payment-based system to induce honest reporting of feedback. The system applies proper scoring rules to each buyer's report, looking to...

Early application programs have turned the college admissions process into a highly strategic arena. It is widely believed, but seldom acknowledged by colleges, that early applicants are favored in admissions decisions. This report is a brief summary of a book that will be published by Harvard...

This paper identifies a novel function for permits: they can be used by the government as an instrument to elicit information about the intentions of private investors to put capital into an area. Such information is a crucial input for the government’s decision on how much infrastructure to...

Using experiments, we examine whether the decision to trust a stranger in a one-shot interaction is equivalent to taking a risky bet, or if a trust decision entails an additional risk premium to balance the costs of trust betrayal. We compare a binary-choice Trust game with a structurally...

Hurricane Katrina did massive damage because New Orleans and the Gulf Coast were not appropriately protected. Wherever natural disasters threaten, the government – in its traditional role as public goods provider – must decide what level of protection to provide to an area. It does so by...

The Maxwell School's Government Performance Project rated the management successes of the 50 states in several areas, such as capital management, human resources and information technology in 1998 and 2000. Variability among the states was significant. Viewing the Maxwell School data as...

Whether regulating mutual funds or chemical manufacturers, government's policy decisions depend on information possessed by industry. But it is not in any industry's interests to share information that will lead to costly regulations. So how do government regulators secure needed information...

Thomas Schelling, winner of the 2005 Nobel Memorial Prize in Economics, was a Founding Father of the Kennedy School of Government. He served the School warmly and well for many years. Schelling always served as an inspiration for his creativity, and as an exemplar for his ability to make his...

Racial profiling is a matter of considerable concern in the U.S., and mutatis mutandis in other countries. Yet, perhaps because of its sensitive nature, there is almost no philosophical reflection on this subject. This essay provides a normative assessment of racial profiling and invites more...