Economic theory is often abused in practical policy-making. There is frequently excessive focus on sophisticated theory at the expense of elementary theory; too much economic knowledge can sometimes be a dangerous thing. Too little attention is paid to the wider economic context, and to the...

The condition for when a price control increases consumer welfare in perfect competition is tighter than often realised. When demand is linear, a small restriction on price only increases consumer surplus if the elasticity of demand exceeds the elasticity of supply; with log-linear or...

We compare the most common methods for selling a company or other asset when participation is costly: a simple simultaneous auction, and a sequential process in which potential buyers decide in turn whether or not to enter the bidding. The sequential process is always more efficient. But...

Today’s regulatory rules, especially the easily-manipulated measures of regulatory capital, have led to costly bank failures. We design a robust regulatory system such that (i) bank losses are credibly borne by the private sector (ii) systemically important institutions cannot collapse...

We propose a new form of hybrid capital for banks, Equity Recourse Notes (ERNs), which ameliorate booms and busts by creating counter-cyclical incentives for banks to raise capital, and so encourage bank lending in bad times. They avoid the flaws of existing contingent convertible bonds...

I describe a new static (sealed-bid) auction for differentiated goods - the "Product-Mix Auction". Bidders bid on multiple assets simultaneously, and bidtakers choose supply functions across assets. The auction yields greater efficiency, revenue, information, and trade than running multiple...

We generalize the War of Attrition model to allow for N+K firms competing for N prizes. Two special cases are of particular interest. First, if firms continue to pay their full costs after dropping out (as in a standard-setting context), each firm’s exit time is independent both of K and of...

We explore the trade-off between a patent's length (its lifetime) and its width (its scope of coverage). A wider patent generally reduces the distortion of consumers' choices between the patented brand of the product and unpatented, lower-priced varieties sold by competitors, it also permits...

This paper reviews the part played by economists in organizing the British third-generation mobile-phone licence auction that concluded on 27 April 2000. It raised £22½ billion ($34 billion or 2½ % of GNP) and was widely described at the time as the biggest auction ever. We discuss the merits...

There were enormous differences in the revenues from the European ‘third generation’ (3G, or ‘MTS’) mobile-phone license auctions, from 20 Euros per capita in Switzerland to 650 Euros per capita in the UK, though the values of the licences sold were similar. Poor auction designs in some...