Economic Inquiry

Articles from Vol. 43, No. 2, April

At the Movies: The Economics of Exhibition Contracts
I. INTRODUCTION The literature on profit sharing stresses asymmetric information. Profit sharing occurs when a party has private information that cannot be credibly revealed or when a party's actions cannot be observed. Economists avoid taste-based...
Bank Competition and Consumer Search over Credit Card Interest Rates
I. INTRODUCTION This study analyzes market outcomes in the credit card industry when credit card banks (CCBs) compete with interest rates and cardholders have different motives for using credit cards. The study takes account of the role of consumer...
Determining Output and Inflation Variability: Are the Phillips Curve and the Monetary Policy Reaction Function Responsible?
I. INTRODUCTION The natural-rate hypothesis that no long-run trade-off exists between inflation and unemployment has won over most macroeconomists. A new trade-off between the variability of inflation and the variability of output has lately attracted...
Does Fact-Finding Promote Settlement? Theory and a Test
I. INTRODUCTION Dispute resolution is of interest in a variety of bargaining environments, from labor relations to insurance. Commonly used forms of dispute resolution include mediation and arbitration. A mediator does not impose a binding settlement;...
Early Round Upsets and Championship Blowouts
I. INTRODUCTION Popular discussions of tournament play often celebrate the success of underdogs in early rounds and decry the prevalence of unexciting finals. Such a pattern might be just a statistical illusion. There are many early round matches,...
Employer Recruitment Strategies and the Labor Market Outcomes of New Hires
I. INTRODUCTION Employers and job seekers are brought together for potential matches through their recruitment and job search activities. Employers may post help-wanted signs, run newspaper advertisements, or seek referrals from private employment...
Information Asymmetry and Competitive Bidding in Auditing
I. INTRODUCTION Recent events in the financial markets have focused attention on the nature of contracts between auditors and their clients. The auditor-client relationship has profound consequences for the financial markets as a whole, as amply...
Longevity and Public Old-Age Pensions
I. INTRODUCTION Conventional economic analysis of intertemporal or intergenerational resource allocation takes longevity as exogenously determined by biological or technological factors. Within this framework, the institution of a mandatory public...
Mental Illness and the Demand for Alcohol, Cocaine, and Cigarettes
I. INTRODUCTION The U.S. Surgeon General (US Department of Health and Human Services [USDHHS] 1999) reports that the indirect costs of mental illness were $79 billion in 1990, and in 1996 the United States spent $69 billion on treatment of mental...
Multicointegration and Sustainability of Fiscal Practices
I. INTRODUCTION Governments are charged with the responsibility of crafting national budgets. Over time budgets tend to move between balance, surplus, and deficit. These fluctuations result from the fact that all too often a government makes financial...
Recycling in Multifamily Dwellings: Does Convenience Matter?
Factors that decrease the the cost of recycling have significant positive correlations with recycling rates in multifamily dwellings (MFDs). Waste-management experts have previously used anecdotes to infer a link between convenience and waste-diversion...
Samuelson's Dictum and the Stock Market
I. INTRODUCTION Paul A. Samuelson has argued that one would expect that the efficient markets hypothesis should work better for individual stocks than for the stock market as a whole: Modern markets show considerable micro efficiency (for...
Some Empirical Evidence on the Effectiveness of Antimerger Relief in the United States
I. INTRODUCTION Section 7 of the Clayton Act of 1914 made it illegal for two competitors to merge if such a merger would result in a significant restriction of competition. In 1950, the Celler-Kefauver amendment closed a significant loophole in...
The Effects of Employment While Pregnant on Health at Birth
I. INTRODUCTION More women are working in the marketplace today than ever before. The Bureau of Labor Statistics (2000) estimates that about 60% of women are currently in the labor force, which is almost a 50% increase from 30 years ago. Much of...
The Expansion of College Education in the United States: Is There Evidence of Declining Cohort Quality?
I. INTRODUCTION In 1940, approximately 5% of men aged 20-64 were college graduates. By 1990, the fraction with a college degree had more than quadrupled to 22.6%. Conversely, more than 70% of men aged 20-64 had not finished high school in 1940....
The Peculiar Externalities of Professional Team Sports
The economics literature has long been divided regarding whether competing sports teams can achieve the same, efficient allocation of playing skills that a revenue-maximizing league monopolist would choose despite the external effects the teams impose...
Why Many Eligible Individuals Choose Not to Go on Welfare
I. INTRODUCTION It has been puzzling to economists why many low-income individuals who are eligible for welfare benefits nevertheless choose not to go on welfare. In the United States, for example, over 20% of eligible individuals choose not to...