This article presents a model of taxi service in a regulated market where radio dispatch and airport cabstand are the primary modes of operation. Regulators have the potential to affect market performance through two means: changes in the number of licensed cabs and changes in drivers' mode...

This article examines the effects of different government expenditures for R&D on private R&D spending and on private sector productivity. Results are consistent with the hypothesis that $1.00 of government contract R&D performed in industry induced about $.27 of private R&D expenditure. Weak...

A monopolist's optimal price path over time is examined for situations in which consumers initially misestimate product quality and learn about it by using the good. Information about the product is bundled with the product itself. Two very different cases are studied. In the optimistic case,...

After reviewing some recent developments in the airline industry, this article tests two hypotheses that were central to the argument for deregulation: (1) that CAB regulation caused airlines to employ excess capacity relative to the capacity that would be provided under unregulated competition;...

Provider insurance is insurance offered by the provider of a product or service against losses or damages incurred in connection with the use of that product or service. It is demonstrated that a rate-setting agency, with no information about consumers, can design a provider-insurance mechanism...

This article extends the economic theory of agency to a simple class of multiperiod situations. In this context we study the role of long-term contracts in controlling moral hazard problems. We characterize the optimal long-term contract, and show that even when the "environment" is separable...

This article examines the impact of current coastal trade restrictions on American intercoastal lumber shipping. The nature of U.S. maritime regulation is briefly reviewed and a model is developed to quantify its effect on lumber shipments, shipping costs, and economic welfare. It is found that...

It has been suggested in the economics literature that strongly risk-averse individuals may tend to gravitate toward large monopolistic firms rather than work for more competitive companies. In this article we provide results of an experiment designed to test this hypothesis. Operating managers...

This article is concerned with the possibility that natural selection can lead to an evolutionarily stable equilibrium where otherwise identical profit maximizing firms follow distinctly different strategies. In biology such occurrences are called polymorphic equilibrium. We develop a model of...

This article considers the role that reputation plays in assuring product quality in markets where consumers can only imperfectly judge product quality even after consumption. Three conclusions are derived. First, high quality firms have more customers because they have fewer dissatisfied...