The principle that theories should be tested by the accuracy of their predictions but not by the realism of their assumptions needs to be qualified. As a practical matter we often need to evaluate the applicability of theories to cases for which they have not been tested by their predictions....

We propose an economic model of business groups that allows for the cooperative behavior of groups of firms, where the number and size of each group is determined endogenously. In this framework, more than one configuration of groups that can arise in equilibrium: several different types of...

We consider interactive epistemic models where individuals are described by both their "knowledge" and their "beliefs." Three intersubjective consistency conditions are examined: Intersubjective Caution (if an individual believes something to be common belief then he knows it to be common...

I develop a new approach for sample selection problems that allows parametric forms of any type to be chosen for both for the selection and the observed variables. The Generalized Parametric Selection (GPS) model can incorporate both duration and count data models, unlike previous parametric...

We study outsourcing from the United States under the offshore assembly program (OAP). Formerly called the 806/807 provision of the U.S. tariff code, and now renamed the 9802 provision of the Harmonized System code, this program allows U.S. firms to export component parts and have them assembled...

We show that Maskin monotone social choice correspondences on sufficiently rich domains satisfy a generalized strategy-proofness property, thus generalizing Muller and Satterthwaite's (1977) theorem to correspondences. <p> From the point of view of Nash implementation theory, the result yields a...</p>

The concept of a strict extended partial order (SEPO) has turned out to be very useful in explaining (resp. rationalizing) non-binary choice functions. The present paper provides a general account of the concept of extended binary relations, i.e., relations between subsets and elements of a...

I examine the effects of FCC regulation on the innovation and introduction of advanced telecommunications services in the U.S. An interim of lighter regulation provides an "experiment" to test the regulatory regime's impact on innovation. The econometric model comprises an arrival process (for...

Before condemning data mining one should distinguish between objective and biased data mining. The former is commendable. Even biased data mining is appropriate when used to illustrate and not to test hypotheses. In the context of testing, the problem with biased data mining arises not from the...