Economic Inquiry

Articles from Vol. 41, No. 2, April

An Empirical Examination of Quality Certification in a "Lemons Market"
I. INTRODUCTION Researchers have long understood that a variety of mechanisms may be used to overcome problems of adverse selection. Stigler (1961, 224) notes that "[s]ome forms of economic organization may be explicable chiefly as devices for eliminating...
Automated Pricing Rules in Electronic Posted Offer Markets
I. INTRODUCTION Electronic commerce affords the opportunity to automate the process by which buyers and sellers engage in an exchange at a mutually agreeable price. For example, buyers on the Internet can use software agents to automate the gathering...
Democrats, Dictators, and Demonstrators
1. INTRODUCTION A sizable amount of recent empirical literature has focused on the relation between democracy and economic growth. However, most of these papers, such as Barro (1996), Helliwell (1994), and the studies summarized in Przeworski and...
Labor Supply of Older Men: Does Social Security Matter?
1. INTRODUCTION Interest in the economic affairs of the elderly has grown tremendously in the past decades. This increased interest in the economics of aging is only natural if one considers the demographic changes that have taken place since World...
Nominal and Real Disturbances and Money Demand in Chinese Hyperinflation
I. INTRODUCTION The analysis of historical episodes of hyperinflation typically concentrates on the impact on money demand from anticipated inflation arising from the overissuance of fiat money. Yet it is possible that prices increase at different...
On the Third Law of Demand
I. INTRODUCTION The Alchian and Allen (1967, 63-64) theorem, sometimes elevated to the status of a third law of demand, as in Bertonazzi et al. (1993), is a clever application of the fundamental principle of economizing behavior. As usually stated,...
Optimality of Investment under Imperfectly Enforceable Financial Contracts
I. INTRODUCTION A well-known implication of asymmetric information in credit markets, as studied by Stiglitz and Weiss (1981), is that when the quality of projects is private information, low-quality projects will drive highquality projects out...
Policy Linkage and Uncertainty in International Agreements
I. INTRODUCTION Negotiations over the North American Free Trade Agreement (NAFTA) brought issues concerning the environment and a country's environmental policies to the forefront of international trade negotiations. As a result, NAFTA includes...
Specific Investments, Flexible Adaptation, and Requirement Contracts
I. INTRODUCTION In bilateral procurement relationships, ex post opportunism may cause underinvestment in relationship-specific investments, as is shown by Klein et al. (1978) and Williamson (1985). In such situations, long-term contracts can help...
Technology and Job Separation among Young Adults, 1980-98
I. INTRODUCTION The belief that job security has declined in recent years is widespread in the United States. During the 1990s, workers' expectations about the likelihood of keeping their job and the ease of finding another position were lower than...
The Effects of Congressional Appropriation Committee Membership on the Distribution of Federal Research Funding to Universities
I. INTRODUCTION In 1994 members of the Republican Party pledged to seek legislation to impose term limits on members of Congress. This pledge stemmed from the popular belief that senior members of Congress tend to promote personal interests or are...
The Supply Side of the Digital Divide: Is There Equal Availability in the Broadband Internet Access Market?
I. INTRODUCTION The Internet has transformed the way Americans work, play, and shop. A new wave of Internet accessibility, the availability of broadband (high-speed) access, has the potential to be as revolutionary as the first wave. Broadband access,...
Transaction Costs and Coalition Stability under Majority Rule
1. INTRODUCTION Under a majority voting rule, representatives of specific political districts must bargain with representatives of other districts to build a coalition for enacting legislation that benefits their narrow constituencies. But the theoretical...