In this article we present the strongest evidence to date that chronic heavy drinkers' consumption is responsive to changes in the price of liquor. We estimate that an increase in the liquor excise tax by one dollar (1967 prices) per proof gallon reduces the liver cirrhosis mortality rate by...

Many tax systems require payment by means of fixed fees, percentages of gross revenues (royalties or ad valorem taxes), or percentages of net income (profit shares or income taxes). Even when payments due under such instruments have the same expected value, their risk-spreading properties may...

(no abstract)

The optimal regulatory strategy to promote research and development aimed at cost reduction is derived for an environment in which the firm's information about the technology of cost reduction, although initially imperfect, is better than that of the regulator. The manner in which the optimal...

The theory of optimal sequential search is used to study an industry where firms make homogeneous products and seek lower costs of production. Research outlays correspond to the cost of search. The research results are regarded as drawings from a probability distribution that depends on the...

The literature on product innovation usually assumes that the probability distribution governing the timing of innovations is the memoryless exponential distribution. We develop a probability model for the minimum time to innovation for a large number of rivals that does not exhibit the...

This article considers a multiproduct market in which an established firm faces an unlimited number of potential competitors, and all firms have identical cost functions exhibiting scale economies. It is shown that, if von Stackelberg leadership is feasible, the established firm's...

Using Weitzman's model of regulation under uncertainty, we analyze a particular contingent price signal under the assumption of many goods and firms. In terms of information assumed available to the regulator, the analysis lies between Weitzman's 1974 and 1978 articles. Under fairly general...

This article studies moral hazard with many agents. The focus is on two features that are novel in a multiagent setting: free riding and competition. The free-rider problem implies a new role for the principal: administering incentive schemes that do not balance the budget. This new role is...

This article studies the relationship between the level of product quality and the structure of an industry under fully dynamic conditions, in which innovations are assumed to take place successively. We extend the Nerlove-Arrow-Gould model of advertising behavior of a monopolist to the R&D...