Evidence suggests that a surprisingly large fraction of firms comply with pollution emission standards even though expected penalities for noncompliance are low. We offer an explanation of this puzzle by extending the standard model of enforcement to include a self-seporting requirement and...

Evidence suggests that a surprisingly large fraction of firms comply with pollution emission standards even though expected penalities for noncompliance are low. We offer an explanation of this puzzle by extending the standard model of enforcement to include a self-seporting requirement and...

The problem of choosing second-best trade policies is modified by including sector-policies as well as tariffs. Formulae for the optimal tariff and sector-specific subsidy are derived and used to study the design of optimal policy menus. The theory is applied to a computable general equilibrium...

Jovanovic and Nyarko (1996) showed that when agents learn-by-doing and are myopic, less advanced agents may adopt new technologies while more advanced firms stick with the old technology since the new technology takes time to learn. In this case, the less advanced agents might eventually...