We consider a parole board that learns about inmates' rehabilitation statuses from observing actions in prison. We show why a board would release one inmate, but not otherwise observationally identical inmates with longer sentences: greater parole board discretion makes additional information...

In this paper, we construct a simple model that illustrates a perverse effect associated with plea bargaining in which an increase in sanctions can lead to reduced deterrence. This finding is derived from the interaction of binding budgetary constraints and plea bargaining. In an environment...

This paper characterizes optimal policies in the presence of tax evasion and undocumented workers. In equilibrium, domestic workers may work exclusively in the formal sector or also in the informal sector. Surprisingly, in equilibrium, wages are always equalized between domestic and undocumented...

In this paper, we construct a simple model that illustrates a perverse effect associated with plea bargaining in which an increase in sanctions can lead to reduced deterrence. This finding is derived from the interaction of binding budgetary constraints and plea bargaining. In an environment...

Unemployment insurance (UI) distorts firms' layoff decisions by reducing the cost of laying off workers. To dampen this increase, it has been suggested that UI should be financed with an experience-rated tax. Despite the fact that increasing the level of experience rating can reduce...