Finance
When Does Extra Risk Strictly Increase an Option’s Value?, Review of Financial Studies (2007)
It is well known that risk increases the value of options. This paper makes that...
game theory
Law and Game Theory (2007)
This is the introduction and contents list for the forthcoming book, Law and Game Theory,...
Japan
Managed Courts under Unstable Political Environments: Recruitments and Resignations in the 1990s Japanese Judiciary (with J. Mark Ramseyer), Journal of Comparative Economics (2007)
Because of the risk of political interference, in countries with managed courts jurists who share...
Law and Economics
Managed Courts under Unstable Political Environments: Recruitments and Resignations in the 1990s Japanese Judiciary (with J. Mark Ramseyer), Journal of Comparative Economics (2007)
Because of the risk of political interference, in countries with managed courts jurists who share...
Law and Game Theory (2007)
This is the introduction and contents list for the forthcoming book, Law and Game Theory,...
Norms in Law and Economics (with Richard McAdams), Handbook of Law and Economics, (2007)
Everyone realizes the importance of social norms as guides to behavior and substitutes for law,...
Explaining Incomplete Contracts as the Result of Contract-Reading Costs, The B.E. Journals in Economic Analysis & Policy (2001)
Much real-world contracting involves finding new clauses to add to a basic agreement, clauses which...
Microeconomics
Letter: Must Homeowners Lose Wealth When House Prices Fall?, The Economists' Voice (2007)
Paradoxically, Eric Rasmusen argues that a fall in house prices might actually raise the wealth...
No subject area
Strategic Implications of Uncertainty over One's Own Private Value in Auctions, BE Press Journal (2006)
Bidders have to decide whether and when to incur the cost of estimating their own...
The Case for Managed Judges: Learning from Japan after the Political Upheaval of 1993 (with J. Mark Ramseyer), University of Pennsylvania Law Review (2006)
Although the executive branch appoints Japanese Supreme Court justices as it does in the United...
The Economics of Agency Law and Contract Formation, American Law and Economics Review (2004)
This article uses the economic approach to address issues that arise in agency law when...
Buyer-Option Contracts, Renegotiation, and the Hold-Up Problem (with Thomas P. Lyon), Journal of Law, Economics and Organization (2004)
Hart & Moore (1999) construct a model to show that contracts perform poorly when the...
Bertrand Competition Under Uncertainty (with Maarten Janssen), Journal of Industrial Economics (2002)
Consider a Bertrand model in which each firm may be inactive with a known probability,...
An Economic Approach to Adultery Law, Marriage and Divorce: An Economic Perspective (2002)
A long- term relationship such as marriage will not operate efficiently without sanctions for misconduct,...
Can High Prices Ensure Product Quality When Buyers Do Not Know the Sellers' Cost? (with Timothy Perri), Economic Inquiry (2001)
The Klein-Leffler (1981) model of product quality does not explain why high-quality firms would dissipate...
Why Are Japanese Judges so Conservative in Politically Charged Cases? (with J. Mark Ramseyer), American Political Science Review (2001)
In politically charged cases, Japanese judges routinely implement the policy preferences of the long- time...
Why Is the Japanese Conviction Rate So High? (with J. Mark Ramseyer), Journal of Legal Studies (2001)
Conviction rates are high in Japan. Why? We suggest it is because Japanese prosecutors are...
The Uneasy Case for the Flat Tax (with F. H. Buckley), Constitutional Political Economy (2000)
There is a secret paradox at the heart of social contract theories. Such theories assume...
Naked Exlusion: Reply (with J. Mark Ramseyer and John Shepard Wiley Jr.), American Economic Review (2000)
Our one- page reply to Whinston and Siegal's forthcoming AER article correcting and elaborating our...
Aphorisms on Writing, Talking, and Listening. (2000)
These are notes on the mechanics of doing research in economics, a series of short,...
Skewed Incentives: Paying for Politics as a Japanese Judge (with J. Mark Ramseyer), Judicature (2000)
A nontechnical survey of our work on Japanese courts for the practitioner journal, Judicature.
Review of Economic Games and Strategic Behavior (1999)
Journal of Economic Literature Review of Economic Games and Strategic Behavior, by Frank Stahler, Cheltenham:...
Creating and Enforcing Norms, with Special Reference to Sanctions (with Richard A. Posner), International Review of Law and Economics (1999)
Two central puzzles about social norms are how they are enforced and how they are...
Why the Japanese Taxpayer Always Loses (with J. Mark Ramseyer), Southern California Law Review (1999)
The tax office wins most cases in Japan. We think about why this might be....
Review of Coasean Economics: Law and Economics and the New Institutional Economics edited by Steven Medema, Journal of Economic Literature (1998)
A book review which talks about what kinds of papers I'd like to see written.
Observed Choice, Estimation, and Optimism about Policy Changes, Public Choice (1998)
A policy will be used more heavily in a particular time and place where its...
The Economics of Desecration: Flag Burning and Related Activities., Journal of Legal Studies (1998)
When a symbol is desecrated, the desecrator obtains benefits while those who venerate the symbol...
From Miranda to Mezzanatto: The Economics of Self Incrimination, Cardozo Law Review (1998)
A 1995 Supreme Court decision allowed defendants in criminal trials to waive their rights to...
Nuisance Suits, The New Palgrave Dictionary of Economics and the Law (1998)
Nuisance suits can be defined a number of ways, explained a number of ways, and...
Lifting the Veil of Ignorance: Personalizing the Marriage Contract (with Jeffrey Stake), Indiana Law Journal (1998)
Modern state laws only allow marriages in which each party can unilaterally divorce the other....
The Observed Choice Problem in Estimating the Cost of Policies, Economics Letters (1998)
A very short version of my Public Choice paper which makes the basic point that...
Review of Timur Kuran, Private Truths, Public Lies: The Social Consequences of Preference Falsification, Journal of Economic Behavior and Organization (1998)
A review of a book on what happens when people's statement of their information depends...
A Theory of Trustees, and Other Thoughts, Public Debt and its Finance in a Model of a Macroeconomic Policy Game: Papers Presented at a Workshop held in Antalya, Turkey on October 10- 11, 1997 (1997)
This paper combined a brief description of my work on negotiation with comments on other...
The Learning Curve in a Competitive Industry (with Emmanuel Petrakis and Santanu Roy), The RAND Journal of Economics (1997)
We consider the learning curve in an industry with free entry and exit, and price-...
Choosing Among Signalling Equilibria in Lobbying Games, Public Choice (1997)
Randolph Sloof has written a comment on the lobbying-as-signalling model in Rasmusen (1993) in which...
Judicial Independence in Civil Law Regimes: Econometrics from Japan (with J. Mark Ramseyer), Journal of Law, Economics, and Organization (1997)
Judges in Japan cannot be fired if their decisions offend the government, but they follow...
Review Discussion: Game Theory and the Law by Douglas Baird, Robert Gertner, and Randall Picker (with Kenneth Dau- Schmidt, Michael Alexeev, Jeff Stake, and Bob Heidt), Law and Society Review (1997)
Our dialogue- form review of the 1994 book by Douglas Baird, Robert Gertner \& Randall...
Signal Jamming and Limit Pricing: A Unified Approach, Public Policy and Economic Analysis (1997)
In signal jamming, an rival uses observed profits to predict profitability, but those profits can...
The Posner Argument for Transferring Health Spending from Old Women to Old Men, Economics Letters (1996)
Richard Posner suggests several arguments for increasing health care spending on males and reducing it...
Stigma and Self-Fulfilling Expectations of Criminality, Journal of Law and Economics (1996)
In modelling crime, economists have focussed on the expected cost of government sanctions to the...
Review of COMPETITION, COMMITMENT, AND WELFARE by Kotaro Suzumura, Journal of Economic Literature (1996)
A short review of a book on oligopoly theory.
Review of Game Theory and the Social Contract: Volume 1, Playing Fair by Ken Binmore, Journal of Economic Literature (1995)
A review of Binmore's book using game theory in setting up foundations for constitutional theory.
Predictable and Unpredictable Error in Tort Awards: The Effect of Plaintiff Self Selection and Signalling, International Review of Law and Economics (1995)
If a tort plaintiff can predict that the court will overestimate damages he is more...
How Optimal Penalties Change with the Amount of Harm, International Review of Law and Economics (1995)
Intuition tells us that the optimal penalty and court care should rise smoothly with the...
Cheap Bribes and the Corruption Ban: A Coordination Game among Rational Legislators (with J. Mark Ramseyer), Public Choice (1994)
Legislators in modern democracies (a) accept bribes that are small compared to value of the...
Judicial Legitimacy: An Interpretation as a Repeated Game, Journal of Law, Economics, and Organization (1994)
If society wishes to maintain an independent judiciary, it faces the problem of how to...
Mutual versus Unilateral Mistake in Contracts (with Ian Ayres), Journal of Legal Studies (1993)
Courts sometimes allow contracts to be voidable because of mistakes in their basic assumptions. The...
Lobbying when the Decisionmaker Can Acquire Independent Information, Public Choice (1993)
Politicians trade off the cost of acquiring and processing information against the benefit of being...
An Income-Satiation Model of Efficiency Wages, Economic Inquiry (1992)
Efficiency wages are wages that exceed a worker's reservation wage. A standard explanation for such...
Defining the Mean-Preserving Spread: 3-pt versus 4-pt (with Emmanuel Petrakis), Decision Making Under Risk and Uncertainty: New Models and Empirical Findings (1992)
The standard way to define a mean-preserving spread is in terms of changes in the...
Managerial Conservatism and Rational Information Acquisition, Journal of Economics and Management Strategy (1992)
Conservative managerial behavior can be rational and profit- maximizing. If the valuation of innovations contains...
Are Equilibrium Strategies Unaffected by Incentives? (with Jack Hirshleifer), Journal of Theoretical Politics (1992)
Tsebelis proposed that in games such as the"Police Game"that have only a mixed strategy equilibrium,...
Comment on Tullock, Hechter, and Wildavsky, Rationality and Society (1992)
Game theory has been criticized as neglecting key aspects of individual behavior and as relying...
Game Theory in Finance, The New Palgrave Dictionary of Money and Finance (1992)
A short survey of the use of game theory in finance.
The Strategy of Sovereign Debt Renegotiations, The Handbook of Country Risk Analysis (1992)
The standard economic theory of perfect competition assumes that there are many buyers and many...
Naked Exclusion (with J. Mark Ramseyer and John Wiley), The American Economic Review (1991)
Ordinarily, a monopoly cannot increase its profits by asking customers to sign agreements not to...
Extending the Economic Theory of Regulation: The Form of Policy (with Mark Zupan), Public Choice (1991)
The mutually beneficial connection between industries and the governments that regulate them is the subject...
Recent Developments in the Economics of Exclusionary Contracts, Canadian Competition Law and Politics at the Centenary (1991)
A short survey of ideas on exclusive-dealing contracts.
Diseconomies of Scale in Employment Contracts (with Todd Zenger), Journal of Law, Economics and Organization (1990)
We find that small teams can write more efficient incentive contracts than large teams when...
Cooperation in a Repeated Prisoner's Dilemma with Ostracism (with David Hirshleifer), Journal of Economic Behavior and Organization (1989)
The unique Nash equilibrium of the finitely repeated n-person Prisoners' Dilemma calls for defection in...
Product Quality with Information Dissemination and Switching Costs, Economics Letters (1989)
Klein and Leffler (1981) construct a model in which expected future prices exceed marginal costs...
Stock Banks and Mutual Banks, Journal of Law and Economics (1988)
Because mutual banks do not allow shareholders to discipline bad managers and so have higher...
Entry for Buyout, Journal of Industrial Economics (1988)
Entry into a monopolized industry may be profitable if the entrant is bought out even...
Moral Hazard in Risk-Averse Teams, RAND Journal of Economics (1987)
Holmstrom (1982) has shown that a non-budget- balancing contract induces a team of risk- neutral...