This paper studies the ambiguous welfare effects of compatibility in a platform market with endogenous content provision. Compatibility can be particularly harmful if it leads to reduced content but can be beneficial if content is sufficiently increased.

In a bargaining setting with asymmetrically informed, inequity-averse parties, a fully efficient mechanism (i.e., the double auction) exists if and only if compassion is strong. Less compassionate parties do not trade in the double auction in the limit of strong envy.

Marginal deterrence concerns the incentives created by criminal penalties for offenders to refrain from committing more harmful acts. We show that when offenders act sequentially, it is often optimal for the level of the sanction, not just the expected sanction, to rise with the severity of the...

The economic analysis of liability rules sponsors strict liability in the case that only injurers can take care to affect expected harm. Yet, negligence is usually the base line in jurisdictions around the world. We establish that negligence is superior if injurers can invest in both care-taking...