The bombshell arrest of Ivan Boesky on November 14, 1986 signaled the intention of then-US attorney for the southern district of New York, Rudy Giuliani, to increase enforcement of laws against insider trading. Looking at concurrent stock price changes, we find that New York companies were...

Others have offered a variety of suggestions to improve the behavior of public officials. Each of these involves linking an official's (public) compensation to a measure of his performance. This is costly because performance will necessarily be imperfectly monitored and so public officials will...