It is generally accepted that good corporate governance, executive compensation and the threat of litigation are all important mechanisms for incentivizing managers of public corporations. While there are significant and robust literatures analyzing each of these policy instruments in isolation,...

Few generalizations in the social sciences enjoy such wide-ranging support as that of diminishing marginal utility of income. Put simply, this proposition states that the effect on subjective well-being of a $1,000 increase in income becomes progressively smaller the higher the initial level of...

What do social survey data tell us about the determinants of happiness? First, that the psychologists' setpoint model is questionable. Life events in the nonpecuniary domain, such as marriage, divorce, and serious disability, have a lasting effect on happiness, and do not simply deflect the...

One of the fundamental contributions of transaction cost theory and institutional economics has been to focus attention on opening the "black box" of contract enforcement, drawing attention to the institutions required to achieve effective and low-cost contract enforcement. The idea that the...

Research has shown that people vary widely in their support or opposition to progressive taxation. We argue here that the perception of progressiveness itself is affected by the nature of the tax system and by the way it is framed, or presented. Experiments conducted over the World-Wide Web and...

Home sellers in the 1950s had no obligation to mention property defects to their buyers as long as they resisted the temptation to conceal latent defects or to lie about the condition of the property. By the mid-1960s the consumer-protective norms applicable to the sale of goods were being...

This paper explores the interdependence between market structure and an important class of extra-rational cognitive biases. Starting with a familiar bilateral monopoly framework, we characterize the endogenous emergence of preference distortions during bargaining which cause negotiators to...

Network externalities may lead contracting parties to stay with a "standardized" term despite preferences for another term. Using a dataset of sovereign bond offerings from 1995 to early 2004, we test the importance of standardization for the modification provisions relating to payment terms. We...

In a rebuttal of Easterlin (1995), Hagerty and Veenhoven (2003) hereafter H-V analyze data for 21 countries and conclude that "growing national income does go with greater happiness." But the U.S. experience does not support this conclusion, which they obtain only by mixing together two sets of...