Subsequent to the nationwide deregulation of the cable TV industry, a number of questions have been raised concerning the conduct of cable firms. Answers to these questions turn upon a fundamental set of issues regarding the economic relationships of demand, pricing, and regulation. In this...

A model of dynamic R&D behavior is presented in which participants in the race have imperfect information about the (true) "hazard rate" of the R&D process. In this model, a firm will be ambivalent about a rival firm's success at an intermediate stage. On the one hand, the probability of winning...

This article presents an econometric analysis of income tax evasion and its detection based on individual-level data drawn from the Internal Revenue Service 1982 and 1985 Taxpayer Compliance Measurement Programs. I specify a model consisting of two equations: the first measures the extent of...

Recent theoretical work has shown that price discrimination can take place in imperfectly competitive, as well as monopoly, markets. The persistence of higher retail margins on unleaded than on leaded gasoline during the 1980s suggests that discrimination may occur even in very competitive...

Strategic variables (such as availability) can be used to increase customers' search costs, thus increasing the price that can be supported in equilibrium. Customers can "purchase" bargaining power by shopping at two firms and then bringing those firms into competition with one another. Knowing...

Prices on some Department of Defense (DoD) procurement contracts are determined by competitive bids, while on others prices are negotiated on the basis of so-called "DoD profit policy," whereby price is equated to expected cost plus a percentage markup. This article focuses on the interaction...

We examine whether the actions of the blockholder and repurchasing managers in targeted repurchases of common stock benefit the repurchasing firm's stockholders. Positive stock returns from the time of the initial investment through the repurchase indicate that blockholders' actions benefit...

Studies of the cost of construction of nuclear power plants rely upon a measure of cost, called "overnight cost," that contradicts accepted capital theory. The studies report evidence that construction cost per megawatt of capacity decreases as plant scale increases. We employ a more correct...

We analyze a procurement problem in which the quality of the delivered product can be observed perfectly by the buyer and supplier, but may not be verifiable, i.e., may not be observable to any third party. We present a set of plausible conditions under which the equilibrium welfare of both the...

We consider a double moral hazard problem in which the efforts of two parties, e.g., a principal who initially owns an enterprise and a risk-averse agent in the enterprise, are not verifiable. The realized value of the enterprise's random profit stream is also unverifiable. There is also no...