We develop a behavioral model of durable good usage with mental accounting for sunk costs. It predicts higher-than-rational usage that attenuates at a rate that increases with sunk costs. Singapore government policy varied the sunk cost of buying a new car. Using Singapore data, we estimate the...

The objective of patent rights is to foster innovation and economic growth. However, to date, there is little robust evidence that patents ldquo;workrdquo; as intended. Here, we study the impact of changes in effective patent rights within panels of up to 54 manufacturing industries in up to 72...

Publishers of computer software and music claimed losses of nearly $16 billion to piracy in 1999. Theoretically, however, piracy may raise legitimate demand through positive demand-side externalities, sampling, and sharing. Accordingly, the actual impact of piracy on the legitimate demand is an...

Does the sunk cost fallacy affect decision-makers in high-stakes situations? We develop a behavioral model of usage of a durable good with mental accounting for sunk costs. It predicts that usage increases in the sunk cost, and attenuates with time at a rate that increases in the sunk cost. The...

This chapter reviews economic analyses of privacy. We begin by scrutinizing the "free market" critique of privacy regulation. Welfare may be non-monotone in the quantity of information, hence there may be excessive incentive to collect information. This result applies to both non-productive and...

We adapt the event study methodology from research in financial economics to study the impact of government enforcement and economic opportunities on information security attacks. We found limited evidence that domestic enforcement deters attacks within the country. However, we found compelling...