The holdup and holdout problems arise in different contexts, but they share certain fundamental similarities that have not generally been recognized. In particular, both involve activities requiring an up-front, non-salvageable investment, and both require the investor to purchase an input, the...

This paper applies Data Envelopment Analysis (DEA) to voting for the Baseball Hall of Fame. The approach interprets a player's career statistics as inputs, and the percentage of votes he received for the HOF as the output. A constructed frontier based on past voting defines the maximum number of...

This paper contributes to the literature on private law enforcement by proposing a novel solution to the problem of underenforcement by monopolistic enforcers. Monopolistic enforcers underinvest in fine collection because, by maximizing net expected revenue, they ignore the social benefits of...

New technologies have not always been greeted with full enthusiasm. Although the Ottomans were quick to adopt advancements in military technology, they waited almost three centuries to sanction printing in Ottoman Turkish (in Arabic characters). Printing spread relatively rapidly throughout...

This paper adapts the theory of efficiency wages to explain the natural vacancy rate in rental housing markets. An equilibrium vacancy rate penalizes landlords who fail to maintain their units because if a tenant vacates a unit, the landlord will not be able to fill it immediately, thus costing...

Modern-day piracy on the high seas once again poses a serious threat to international shipping. This paper develops an economic of model of piracy that emphasizes the strategic interaction between pirates (offenders) and shippers (victims), a factor not previously studied in the law enforcement...

Article 100 of the U.N. Convention on the Law of the Sea requires signatories to “cooperate” against maritime piracy, but “cooperate” is undefined. Enforcement is a public good – creating uncompensated benefits for others, so suffering from free-rider problems. Our analysis readily...

Although the holdout problem is a well-established part of legal and economic lore, the exact source of the problem is not well understood. The problem is usually attributed to high transaction costs or excessive bargaining power on the part of sellers once they recognize the scope of the...

Under the standard economic model of torts, punitive damages correct for imperfect detection. Incorporating litigation costs into the model provides a justification for punitive damage caps. At the optimum, caps balance deterrence against the cost of litigation. Empirical testing of the model is...

The Supreme Court decision in Kelo v. New London (2005) authorized the use of eminent domain for economic redevelopment projects provided that there are sufficient spillover benefits to the public in the form of enhanced taxes and new jobs. This paper examines the economic basis for this...