The consequences of commitment failure have been missing from debates about the decentralized regulation of automobile emissions and other sources of local consumption externalities. Even when the direct effects of such products are limited to a single jurisdiction, the presence of increasing...

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...

Studies of federalism often assume that a central government's policy choices are exogenously restricted to be uniform across political subdivisions. Drawing from the literature on contracts and organization, this paper provides a justification for the much-criticized assumption. Though...

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 demonstrates how biases may offset each other and lead to correct decisions. If only some biases...

Cost-benefit analyses typically ignore the importance of relative position. That is, they do not take into account the possibility that people value particular goods, services, or other determinants of well-being through comparisons with others. Robert Frank and Cass Sunstein have recently...