This article explores the implications of endogenous product quality (and therefore endogenous output) in the empirical estimation of cost functions for regulated automobile collision insurance firms. It contains a structural model of such a firm and provides an illustration of the types of...

On the basis of data from a survey of almost 400 consumers, this article assesses whether consumer behavior is responsive to information about product hazards that is provided in response to regulation. We find that the extent to which consumers take precautions is consistent with the level of...

We propose a new theory of predation based on "signal-jamming." In our model the predator's characteristics are common knowledge, while the entrant is uncertain of his own future profitability. The entrant uses his current profit to decide whether to remain in the market, and the predator preys...

This article analyzes properties and implications of multiperiod managerial labor contracts under two alternative hypotheses: incentives, in which productivity depends on unobservable effort, and learning, in which ability is unknown and is revealed over time. Shared and conflicting implications...

Regulations are often introduced and reformed in response to unanticipated changes in market forces. In late 1973, for example, OPEC quadrupled the world price of oil and U.S. policy makers responded by imposing oil price regulation. Such events pose a fundamental problem of interpretation for...