What is the appropriate lump-sum compensation for loss of work income in personal injury cases? Since generally future work income is not known with certainty, compensation for its loss must be based on statistical considerations. Typically, courts have based awards on mean or median work...

We explore the relation between variability in the rate of return to human capital and investment in education in the context of migration. Specifically, we show that if migration is a possibility, such variability in the rate of return to human capital can induce residents of developing...

In this paper we show that costs associated with infractions of property rights, such as theft, can be reduced by imposing lower penal-ties on individuals who admit to such infractions and make restitution. We find that the socially optimal penalty on a confessed thief may be zero (complete...

In this paper we show that costs associated with infractions of property rights, such as theft, can be reduced by imposing lower penal-ties on individuals who admit to such infractions and make restitution. We find that the socially optimal penalty on a confessed thief may be zero (complete...

We explore the relation between variability in the rate of return to human capital and investment in education in the context of migration. Specifically, we show that if migration is a possibility, such variability in the rate of return to human capital can induce residents of developing...

Barriers and border patrols complement amnesty in a coherent policy that creates incentives for illegal immigrants to self-select on the basis of ability in a way that benefits a rich host country. We consider the roles of barriers to migration and immigration amnesties in greater depth and, in...

This paper provides an explanation for the emergence of political extremism in an environment in which a change in “ré gime” requires an investment that benefits more than one player. We show that in order to mitigate the effects of free riding, players may choose extreme positions....

Despite the documented importance of transport costs for firms with sales in geographically separated markets, theoretical analyses typically ignore such costs. This paper analyzes the effects of transport costs for a risk averse, competitive firm selling a single good in a domestic (certain)...