Akerlof and Dickens (1982) suggested that in a model of criminal behavior which considered the effects of cognitive dissonance, increasing the severity of punishment could increase the crime rate. This paper demonstrates that that conjecture was correct. With cognitive dissonance, people may...

For many reasons a group of workers may have sufficient bargaining power to claim for themselves some share of any monopoly surplus earned by an enterprise and (in the short run) a share of the return on fixed assets. This paper explores the effect of the threat of collective action on wages and...

When estimating linear models using grouped data researchers typically weight each observation by the group size. Under the assumption that the regression errors for the underlying micro data have expected values of zero, are independent and are homoscedastic, this procedure produces best linear...

Several efficiency wage theories of wage determination have the property that identical workers are more productive in high wage industries and that the promotion of employment in high wage industries can increase GDP (and some measures of welfare). I argue that while policies to favor high wage...

Although intuitively appealing, the use of hedonic wage estimates to determine people's willingness to pay to avoid the risk of fatal hazards is fraught with problems. The theoretical basis for such estimates are flawed in a number of important ways. The underlying behavioral model is wrong,...

A rent-extraction model that takes into account workers' limited information about the profitability of the company they work for is developed. In that model high wage industries have high VPL so policies to shift employment to high wage industries are appropriate and past empirical studies of...