In the behavioral industrial organization literature, market forces may not eliminate inefficiencies associated with biased consumers. Regulations usually exist that could, but we show that self-governing citizen-consumers will not always enact these welfare-improving policies. In a market for...

In a system of divided power, public sector agencies are an important front in the day-to-day battle for political supremacy between the executive and the legislature. The executive's key agents in this conflict are his appointees, who are observed playing two broad roles: allies, where they...

Why do bureaucratic principals appoint agents who hold different policy views from themselves? We posit an explanation based on the interplay between two types of agency costs: shirking on information production and policy bias. Principals employ biased agents because they shirk less. This...

Compared with other types of policy, regulation is very persistent, even when inefficient. We propose an explanation for regulatory persistence based on regulatory fog, the phenomenon by which regulation obscures information about the effects of deregulation. We construct a dynamic model of...