We use experimental methods to investigate the extent to which breakdowns in coordination can lead to bank runs. Subjects decide whether to leave money deposited in a bank or withdraw it early; a run occurs when there are too many early withdrawals. We explore the effects of randomly forcing...

There has been considerable controversy over the empirical significance of the theoretically predicted pollution haven hypothesis. Generally, empirical papers have failed to find an effect on industrial location of weaker or stricter environmental regulations. In this paper we find strong...

Pippenger and Phillips (forthcoming) show how four common pitfalls cause cointegration tests to reject the law of one price when in fact it holds. They conclude that there is no reliable evidence that rejects the LOP. We consider a stronger test, half lives. The literature suggests that half...

This paper offers an explanation for the rationality of why successful businesses sometimes maintain excess demand. The explanation is motivated from the signaling role of excess demand for firms. Considering a monopolistic market for a good whose quality is not known to the consumers, a firm...

Most scholars and antitrust cases have defined hospital service markets as primarily local. But, two recent decisions have greatly expanded geographic markets, incorporating hospitals as far as 100 miles apart. Managed care plans, now important in most markets, were believed to shift patients to...

This paper discusses three key elements of stochastic growth in the Schumpeterian dynamics. These elements comprise the new entry of firms in an industry, the displacement of the old technology by the new and the nonlinear impact of learning by doing on the growth of innovating firms. Each of...

Most existing models of fiscal competition between states within federations or regional unions share at least two common features. First, they focus on inter-jurisdictional competition in but one policy instrument, for example, taxes, public goods or environmental quality. The second is that...

This paper measures the economic impact of climate change on US agricultural land. We replicate the previous literature's implementation of the hedonic approach and find that it produces estimates of the effect of climate change that are very sensitive to decisions about the appropriate control...