We examine several theoretical and empirical issues concerning punitive damage awards and their importance to business. First, we argue that previous justifications of punitive damage awards ignore the role of private contracting and reputation in assuring contractual performance. In the absence...

This paper examines the sizes of the fines, damage awards, remediation costs, and market value losses imposed on companies that violate environmental regulations. Firms that violate environmental laws suffer statistically significant losses in the market value of firm equity. The losses,...

Fraud scandals can create incentives to change managers in an attempt to improve the firm's performance, recover lost reputational capital, or limit the firm's exposure to liabilities that arise from the fraud. It also is possible that the revelation of fraud creates incentives to change the...

Most economists agree that opportunistic behavior by politicians is limited by the threat of reelection. By implication, the level of shirking should be the greatest when a politician decides to leave office. This paper seeks to learn whether shirking can be reduced when opportunities exist for...

It is frequently assumed that safe-storage gun laws reduce accidental gun deaths and total suicides, while the possible impact on crime rates is ignored. We find no support that safe-storage laws reduce either juvenile accidental gun deaths or suicides. Instead, these storage requirements appear...

Dan A. Black and Daniel S. Nagin state that my article with David Mustard assumes that the effect of concealed-handgun laws is constant over time, that the effect is the same across states, that the article does not control for local time trends, and that we did not investigate whether the...

The authors resurrects an idea due to J. Hirshleifer (1971) by examining how one firm might profit by trading in the securities of other firms whose values are dependent upon the first firm's actions. They focus on the case of entry: can an entrant profit from trading in the securities of an...