This paper provides an explanation for the common observation that higher income neighborhoods typically receive better public services compared with lower income neighborhoods. Intuitively, one might expect that lower income groups, which usually form the voting majority of cities, would object...

Why do firms sometimes choose to undertake their R&D by financing start-up companies, while other times they do it in their internal labs? We present a model where the choice of R&D is driven by information asymmetries on the quality of the project between the corporate venture capitalist and...

The positions taken by prosecutors and defense lawyers on proposed jury instructions on lesser-included offenses provide evidence that juries do not follow the law strictly. This paper develops a simple model of expected utility to predict how jurors make their decisions. The model explains a...

In a general model of common-value second-price auctions with differential information, we show equivalence between the following characteristics of a bidder: (i) having a dominant strategy; (ii) possessing superior information; (iii) being immune from winner's curse. When a dominant strategy...

The case of a strong contestant who has no direct way to demonstrate its strength and may have to send a costly signal to prove it appears frequently in the signaling literature. The authors examine what occurs in signaling models with two or more contestants. The receiver of the signal may...