Regulators of natural monopolies advocate inducing monopolies to maximize the sum of consumer and producer surplus to the extent possible. Although such maximization is efficient in partial equilibrium, its general equilibrium properties have not yet been fully explored. We study the welfare...

Our companion paper introduced a new general equilibrium concept, called PDME, in which a natural monopoly maximizes its industry's surplus. While PDME's are always efficient, decentralization and existence sometimes fail under increasing returns to scale. This paper derives conditions under...

The bias of forward exchange rates as a predictor of future spot rates is typically explained or decomposed as (1) a risk premium and (2) a convexity term which accounts for the fact that, when there is stochastic inflation, nominal gains from forward currency speculation are higher than real...

Aaron Edlin points out that Microsoft continues to profit at its users' expense by creating incompatibilities, and suggests that you think twice before asking Santa for a new Windows machine with Vista and Office 2007.

Aaron Edlin recommends starting the rescue with containment --- unlimited deposit insurance and continuous access to funds --- and then moving to a well thought out plan to quash the financial flames.

The Treasury wants a blank check for $700 billion, at taxpayer expense; instead a businessman like Buffett should be given the job of making the taxpayers some money out of this mess, according to Aaron Edlin.

Although antitrust courts sometimes stress the competitive process, they have not deeply explored what that process is. Inspired by the theory of the core, we explore the idea that the competitive process is the process of sellers and buyers forming improving coalitions. Much of antitrust can be...

For voters with ‘social’ preferences, the expected utility of voting is approximately independent of the size of the electorate, suggesting that rational voter turnouts can be substantial even in large elections. Less important elections are predicted to have lower turnout, but a...

Although antitrust courts sometimes stress the competitive process, they have not deeply explored what that process is. Inspired by the theory of the core, we explore the idea that the competitive process is the process of sellers and buyers forming improving coalitions. Much of antitrust can be...

Many law and economics models concern static efficiency and redistribution. The standard analysis of dynamic industries requires lawmakers to balance faster innovation against lower consumer prices. Sustained growth dominates these effects, so law and growth economics should focus on maximizing...