Economic Inquiry

Articles from Vol. 39, No. 4, October

Bargaining Experiments with Deadlines and Random Delays
OWEN R. PHILLIPS (*) I. INTRODUCTION Many bargaining situations involve deadlines and delays in the transmission of offers. Corporate takeovers, legal settlements, and labor union contracts are examples of bargains that can have random delays...
Can High Prices Ensure Product Quality When Buyers Do Not Know the Sellers' Cost?
TIMOTHY J. PERRI (*) I. INTRODUCTION When consumers are unaware of product quality before they buy, producers can nonetheless be punished for providing low quality by losing repeat business. Klein and Leffler (1981) demonstrate that under fairly...
Consumer Behavior in the United States: Implications for Social Security Reform
PAUL EVANS (*) I. INTRODUCTION The reform of the U.S. social security system is now attracting much attention. A wide range of proposals for reform have been put forward, ranging from modest modifications to complete privatization. (1) In choosing...
Declining Share of Small Firms in U.S. Output: Causes and Consequences
JANG-TING GUO (*) I. INTRODUCTION According to the Small Business Administration's (SBA) calculations, as shown in Table 1, the contribution of small firms to U.S. national income was 58% in 1958, which then declined steadily to 51% in 1982 and...
Editor's Report. (Economic Inquiry)
The 2000 volume of Economic Inquiry consisted of 45 papers in a wide variety of fields. The techniques used in these papers ran the gamut from empirical studies to experimental studies to theoretical studies. The fields with the most papers were labor,...
Independent Service Organizations and Economic Efficiency
DAVID E. MILLS (*) I. INTRODUCTION Many manufacturers of capital equipment provide maintenance service to their equipment users. Sometimes equipment and service are sold separately and at other times they are bundled (for example, through leases...
Measuring the Economic Effects of Military Base Closures
MICHAEL M. KNETTER (*) I. INTRODUCTION Military spending in the United States has been reduced dramatically in recent years. Federal outlays on national defense fell from 6.2% of GDP in 1986 to 3.2% in 1998, a decline of about 25% in real dollar...
Mixups in the Warehouse: Centralized and Decentralized Multi-Plant Firms
LYNN HUNNICUTT (*) I. INTRODUCTION All firms receive information and use it to make decisions. Multi-plant firms receive information at scattered locations and must choose how this knowledge will flow and how decisions will be made. The firm...
Panel Tests of Okun's Law for Ten Industrial Countries
DONALD G. FREEMAN (*) I. INTRODUCTION "Okun's Law" describes an empirical regularity between unemployment and real output growth: "... each extra percentage point in the unemployment rate above four percent (i.e., full employment) has been associated...
Payoff Effects in Information Cascade Experiments
LISA R. ANDERSON (*) I. INTRODUCTION This article examines payoff effects in "information cascade" experiments. (1) Cascade experiments provide a unique environment to study errors because decisions are made publicly and in sequence, allowing...
Racial Discrimination in Professional Basketball: Evidence from Nielsen Ratings
JONAS P. FUNK (*) I. INTRODUCTION Are black professional athletes subject to racial discrimination? This question has received an enormous amount of popular and scholarly attention. However, despite numerous economic studies that have attempted...
Reputational Capital and Academic Pay
GEOFFREY K. TURNBULL (*) I. INTRODUCTION Economists continue to have a Strong interest in academic labor markets, as the steady stream of earnings studies over the past several decades readily attests. The academic labor market draws the attention...
Risky Arbitrage, Limits of Arbitrage, and Nonlinear Adjustment in the Dividend-Price Ratio
MARK P. TAYLOR (*) I. INTRODUCTION The present value model of stock prices has generally been rejected on U.S. data, as in Campbell and Shifler (1987, 1988a, 1988b). (1) While this may be taken as evidence against the efficient markets hypothesis,...
Strategic Groups and Rent Dissipation
SANGHACK LEE (*) I. INTRODUCTION A rent-seeking contest is a situation in which players compete with one another by expending outlays to win a rent. Examples abound. When a positive monopoly rent is secured under government protection, firms...
The Effect of Cocaine Prices on Crime
JEFF DESIMONE (*) I. INTRODUCTION It is undeniable that cocaine use is related to crime. In 1998, 32.9 percent of individuals aged 15 and above who were arrested for non-drug violent and property offenses and screened for illegal drug use as...
Tournaments as a Worker Discipline Device
C. C. YANG (*) I. INTRODUCTION In the absence of unemployment, a worker caught shirking and subsequently fired could obtain a new job at the market wage without difficulty. As a result of this and the imperfect monitoring of workers' on-the-job...
Understanding Investment Irreversibility in General Equilibrium
MIQUEL FAIG (*) I. INTRODUCTION Many forms of investment are irreversible. A growing body of literature (1) has shown that irreversibility is important for firms' investment decisions under uncertainty. However, we still know little about the...