The US Corporate Average Fuel Economy (CAFE) regulation mandates, subject to a civil penalty, producers to achieve a certain fleet average fuel economy on sales of new passenger cars. Analysing the incentive effects of CAFE, we find that it affords differential tax treatment to car models with...

This paper examines the role of liability for past environmental contamination in the privatization processes of Central and Eastern Europe. The theoretical section establishes a link between a risk-averse investor’s amount of information regarding the extent of past environmental...

Because standards and regulations respond to a society's demand for specific public goods, we expect them to be shaped by preferences, endowments, technologies - the fundamental determinants of this demand. There is no a priori reason why standards should be equal in different societies. This...

Traditional analyses of standards in international trade identify standards as government regulations and investigate the potential for distortion of trade flows. In reality, however, private industry groups exercise critical influence on the determination of technical standards. The composition...

Plurilateral agreements in the WTO context allow sub-sets of countries to agree to commitments in specific policy areas that only apply to signatories, and thus allow for ‘variable geometry’ in the WTO. Current WTO rules make it much more difficult to pursue the plurilateral route than to...

The objective of this paper is to develop an analytical framework for estimation of the parameters of a structural model of an incentive contract under moral hazard, taking into account agents heterogeneity in preferences. We show that allowing the principal to strategically distribute the...

This Paper analyses the welfare effects of price restrictions on private contracting in a world where agents have a limited cognitive ability. People compute the costs and benefits of entering a transaction with an error. The government knows the distribution of true costs and benefits as well...

Under contingent fees the attorney gets a share of the judgement; under conditional fees they get an upscale premium if the case is won, which is, however, unrelated to the adjudicated amount. We compare conditional and contingent fees in a framework where lawyers choose between a safe and a...

Under contingent fees the attorney gets a share of the judgement; under conditional fees the lawyer gets an upscale premium if the case is won which is, however, unrelated to the adjudicated amount. We compare conditional and contingent fees in a framework where lawyers are uninformed about the...

Increasing penalty structures for repeat offenses are ubiquitous in penal codes, despite little empirical or theoretical support. Multi-period models of criminal enforcement based on the standard economic approach of Becker (1968) generally find that the optimal penalty structure is either flat...