Though economists assume that intertemporal preferences are time-consistent, evidence suggests that a person's relative preference for well-being at an earlier moment over a later moment increases as the earlier moment gets closer. We explore the beh avioral and welfare implications of such...

In active investment climates where firms sequentially improve each other's products, a patent can terminate either because it expires or because a noninfringing innovation displaces it in the market. The patent breadth and patent life together determine which of these occurs first. We...

The economic conception of human behavior assumes that a person has a single set of well-defined goals, and that the person's behavior is chosen to best achieve those goals. We develop a model in which a person's behavior is the outcome of an interaction between two systems: a deliberative...

Evidence suggests that people understand qualitatively how tastes change over time, but underestimate the magnitudes. This evidence is limited, however, to laboratory evidence or surveys of reported happiness. We test for such projection bias in field data. Using data on catalog orders of...

This paper examines patent protection in an endogenous-growth model. Our aim is twofold. First, we show how the patent policies discussed by the recent patent-design literature can influence R&D in the endogenous-growth framework, where the role of patents has been largely ignored. Second, we...

This paper considers a model of reference-dependent utility in which the individual makes a conscious choice of her reference point for future consumption. The model incorporates the combination of loss aversion and anticipatory utility as competing forces in the determination of the optimal...

The standard framework for analyzing games with incomplete information models players as if they form beliefs about their opponents' beliefs about their opponents' beliefs and so on, that is, as if players have an infinite depth of reasoning. This strong assumption has nontrivial implications,...