Final-offer arbitration in Major League Baseball provides an ideal setting for examining the empirical regularities that are associated with bargaining failure, since final offers, salaries, and player statistics, which provide the fundamental facts for the case, are all readily available. Using...

By examining an online computer exchange, we find that sellers who place higher nonbinding ask prices have higher outstanding offers and remain on the exchange longer, suggesting a willingness to hold out for higher offers. Additionally, higher ask prices deter buyers from making offers. The...

Incompatibility in markets with network effects can either benefit orharm consumers. Incompatibility reduces consumers' ability to "mixand match" components offered by different sellers, but can also beassociated with changes in product attributes that might benefitconsumers. In this paper, we...

Policymakers face an increasing number of questions regarding whether markets efficiently choose technological standards. In this essay I survey the economic literature regarding standards, focusing on arguments that markets move between standards either too slowly or too swiftly.

We document cross-individual variation in U.S. credit card borrowing costs (APRs) that is large enough to explain substantial differences in household saving rates. Borrower default risk and card characteristics explain roughly 40% of APRs. The remaining dispersion exists because a borrower can...

The Tax Reform Act of 1986 (TRA 86) phased out the deductibility of most nonmortgage interest and also introduced new marginal tax rates that reduced the tax advantage of all types of debt. I estimate that by 1991 aggregate mortgage debt was over 1 percent higher, credit card debt approximately...