The authors show that individuals' errors in identifying the relationships among variables cause downward biases in the aggregate that are equivalent to the public underestimating the strengths of the true relationships. They argue that rational expectations has considered only the...

Union status models ignore the fact that rent-seeking prospective members have an incentive to bid up entry costs so that higher union wage gains make union jobs more costly to obtain. The standard presumption that higher union wages cause firms to substitute toward higher quality workers is...

Many critics believe that since high income criminals can afford to purchase better legal services they are less severely punished than poor criminals who commit equivalent crimes. Others are concerned that the penalties imposed on criminals are "too small." This paper shows that ignoring the...

This paper demonstrates that plausible cost-based explanations exist for what are commonly perceived to be cases of price discrimination. The authors explain such commonly discussed problems as the price spreads of retail gasoline products, the "high" price of dinners at restaurants, the "high"...

There is general agreement that burglary produces social costs over and beyond the damage done to the victim if a crime raises other potential victims' subjective estimates of being robbed and thus increases their investments in protecting themselves (e.g., purchasing more locks). Economists...

The authors' note shows that the level of risk-sharing is not likely to increase when a deficit is created. A certain level of insurance can as easily be accomplished under a balanced budget or under a surplus, and the creation of a deficit does not provide a superior means, and probably an...