This paper presents a new model of political competition in which candidates belong to factions. Before elections, factions compete to direct local public goods to their local constituencies. The model of factional competition delivers a rich set of implications relating the internal...

Police checking for illegal drugs are much more likely to search the vehicles of African-American motorists than those of white motorists. This paper develops a model of police and motorist behavior that suggests an empirical test for distinguishing whether this disparity is due to racial...

We provide evidence of advantageous selection in the Medigap insurance market and analyze its sources. Conditional on controls for Medigap prices, those with Medigap spend, on average, $4,000 less on medical care than those without. But if we condition on health, those with Medigap spend $2,000...

The authors argue that many goods and decisions are not allocated or made through markets. They interpret an agent's status as a ranking device that determines how well he or she fares in the nonmarket sector. The existence of a nonmarket sector can endogenously generate a concern for relative...

A standard demand-deposit contract in which individuals are entitled to their full deposit at any time provided the bank is solvent is analyzed in a context in which there are no exogenous events on which agents condition their behavior and a unique equilibrium involving a bank run with positive...