Economists often associate information efficiency of prices with allocative (Pareto) efficiency. When arbitrageurs connect segmented markets to correct a misallocation of risk, this assumption is sound. However, when opportunities for arbitrage or financial innovation arise from mispricings...

Simon Kuznets, Eastern European Jewish immigrant and Nobel laureate, typified data-driven caution of the discipline of empirical economics he helped found. Yet a motive force behind his path-breaking development economics of inequality, culture, institutions, demographics and human capital was a...

Should banks (through Visa) be allowed to own debit clearing networks? This problem combines the classic Cournot (1838)-Spengler (1950) double marginalization problem with the more recent literature on two-sided markets (Rochet and Tirole, 2003). Because both the double marginalization (Weyl,...

Scientists use diverse evidence to learn about the relative validity of various broad theories. Given the lack of statistical structure in this scientific learning problem, techniques of model selection and meta-analysis are not directly useful as quantitative guides. I use five simplifying...

Bidders' psychological biases can have important effects on behavior in auctions and the principles of auction design. I consider two potential sources of the winner's curse in common values auctions. The first, overconfidence, is here defined for the first time in a fully general, distribution...

I argue that individuals may be as problematic political agents as groups. In doing so, I draw on theory from economics, philosophy and computer science and evidence from psychology, neuroscience and biology. If successful this argument undermines agency-based justifications for embracing strong...

The original motivations of antitrust suggest an alternative remedy for market power: changes to corporate governance to include stakeholders who are subject to this power. In contrast to structural and behavioral remedies, “stakeholder remedies,” as we call them, have several desirable...

We extend five principles of tax incidence under perfect competition to a general model of imperfect competition. The principles cover 1) the independence of physical and economic incidence, the 2) qualitative and 3) quantitative manner in which taxes are split between consumers and producers,...

I develop a general theory of monopoly pricing of networks. Platforms use insulating tariffs to avoid coordination failure, implementing any desired allocation. Profit-maximization distorts in the spirit of Spence (1975) by internalizing only network externalities to marginal users. Thus the...

Rochet and Tirole (2003) consider the consumer Ramsey problem in a model of two-sided markets. I extend their analysis to the social Ramsey and Lindahl problems, comparing the solutions to all three to monopoly pricing