In light of the extensive theoretical evidence suggesting absence of equilibrium in voting models, Tullock (1981) asks "Why So Much Stability?" Our results suggest the following answer: Political agents engaged in long-term relationships can sustain highly stable allocations if there are...

We study the dynamics of price regulation for an industry adjusting to exogenous technological progress. First, we characterize the optimal capacity path and replacement cycles in a neoclassical investment model. Second, we show that naive rate-of-return regulation, which ignores components of...