Responding to an open invitation, 18 scholars with 4k+ Google Scholar cites point to a decade-or-more old paper with cite count below his or her h-index. The contributors are Doug Allen, Niclas Berggren, Christian Bjornskov, Peter Boettke, Nick Bostrom, Bryan Caplan, Joshua Gans, Terri Griffith, Zoe Hilton, Dan Klein, Douglas Noonan, Michael Ostrovsky, Sam Peltzman, Eric Rasmusen, Paul Rubin, Steve Sheffrin, Stefan Voigt, and Richard Wagner.

Informal social sanctions such as ostracism are most communities’ primary means of controlling deviance, with formal legal sanctions a costlier backup mechanism, but outside university laboratories, studies of ostracism barely exist. We construct a formal model and examine legal cases brought by targets of Japanese village ostracism. Villagers truly offending against social welfare do not bring these suits. Rather, much ostracism is opportunistic — to extort property, hide communitywide malfeasance, or harass rivals. Typically, the objective is not to employ government’s coercive power, but to have the court publicly certify that the target of ostracism is not really culpable.

We characterize the mixed-strategy equilibria for the bargaining game in which two players simultaneously bid for a share of a pie and receive shares proportional to their bids, or zero if the bids sum to more than 100%. Of particular interest is the symmetric equilibrium in which each player's support is a single interval. This consists of a convex increasing density f1(p) on [a, 1-a] and an atom of probability at a, and is unique for given a ∈ (0, .5). The two outcomes with highest probability are breakdown and a 50-50 split. We use the same approach to characterize all symmetric and asymmetric equilibria (such as "hawk-dove") that mix over a finite set of bids and for general sharing rules. We extend Malueg's 2010 proof of existence to uniqueness of equilibria with any "balanced" compact set A ∈ (0,1) as bid supports (but do not characterize them).

Firms seem to care a lot about "risk management": the practice of hedging risks whether they are correlated with market risk or not. The standard reasons why widely held corporations might be averse to idiosyncratic risk are based on the principal-agent problem, bankruptcy costs, external finance, and tax convexity. This paper offers a different reason: idiosyncratic risk makes business decisions more difficult. Risk can increase the value of investment projects because of option value. We must distinguish, however, between risk over the expected value of profits ("value risk") and risk over the volatility of cash flows ("cash-flow noise"). Value risk is good because an unprofitable policy can be abandoned. Cash-flow noise is bad because it makes learning when to abandon more difficult. This distinction is unrelated to Knightian risk or ambiguity aversion, and it matters even if the firm's agents are risk neutral.

Nash (1950) and Rubinstein (1982) give two different justifications for a 50-50 split of surplus to be the outcome of bargaining with two players. Nash's axioms extend to n players, but the search for a satisfactory n-player non-cooperative game theory model of bargaining has been fruitless. I offer a simple static model that reaches a 50-50 split (or 1/n) as the unique equilibrium. Each player chooses a "toughness level" simultaneously, but greater toughness always generates a risk of breakdown. Introducing asymmetry, a player who is more risk averse gets a smaller share in equilibrium. "Bargaining strength" can also be parameterized to yield an asymmetric split. The model can be expanded to resemble Rubinstein (1982) by making breakdown mere delay, but with an exact 50-50 split if the player's discount rates are equal. The model only needs minimal assumptions on breakdown probability and pie division as functions of toughness and has a clear intuition: whoever has a bigger share loses more from breakdown and hence has less incentive to be tough.

Certifiers of quality often report only coarse grades to the public despite having measured quality more finely, e.g., Pass or Certified instead of 73 out of 100. Why? We show that coarse grades result in more information being provided to the public because the coarseness encourages those of middling quality to apply for certification. Dropping exact grading in favor of the best coarse grading scheme always reduces public uncertainty because the extra participation outweighs the coarser reporting. In some circumstances, the coarsest meaningful grading scheme, pass-fail grading, is the most informative.

In 1969, Japan launched a massive subsidy program for the “burakumin” outcastes. The subsidies attracted the mob, and the higher incomes now available through organized crime attracted many burakumin. Thus, the subsidies gave new support to the tendency many Japanese already had to equate the burakumin with the mob. The government ended the subsidies in 2002. We explore the effect of the termination by merging 30 years of municipality data with a long‐suppressed 1936 census of burakumin neighborhoods. We find that out‐migration from municipalities with more burakumin increased after the end of the program. Apparently, the subsidies restrained young burakumin from joining mainstream society. We also find that despite the end of government‐subsidized amenities, once the subsidies neared their end, real estate prices rose in municipalities with burakumin neighborhoods. With the subsidies gone and the mob in retreat, other Japanese found the formerly burakumin communities increasingly attractive places to live.

The 2017 tax bill put a cap of $10,000 on the deduction for state and local taxes, while retaining existing rules for charitable donations. It has been suggested that states could enact 100% state tax credits for people who donate money to the state, so taxpayers could donate instead of pay taxes and thus still be able to deduct as much as they want on their federal tax returns. I disagree, and argue that under the past and present Tax Code these "donations" would and should be treated as quid pro quo items, since the recipient transfers something of value to the donor.

Asymmetric information can help achieve an efficient equilibrium in repeated coordination games. If there is a small probability that one player can play only one of a continuum of moves, that player can pretend to be of the constrained type and other players will coordinate with him. This hurts efficiency in the repeated battle of the sexes, however, by knocking out the pure-strategy equilibria.

What happens when an incumbent contest winner faces possible entry and challenge from later rivals? In deciding whether to pay a cost to enter immediately, later, or never, each rival must look ahead to future rivals. If the prize is relatively small, the first rival’s expected payoff from entry is negative if he faces the prospect of having to defeat a second rival, but positive if the second rival himself fears to enter because of later rivals. As a result, in equilibrium no rivals enter when the number of rivals is even, and exactly one enters when the number is odd. If the prize is larger, the equilibria become complex but still include equilibria with no entry. In the setting of challenges to a political leader, it can happen that the incumbent can survive even if he is weaker than his rivals, he may wish to end the advantage of incumbency, and a player may benefit by weakening his ability win a given contest. Rasmusen: Dan R. and Catherine M. Dalton Professor, Department of Business Economics and Public Policy, Kelley School of Business, Indiana University. 1309 E. 10th Street, Bloomington, Indiana, 47405-1701. (812) 8559219. erasmuse@indiana.edu, http://www.rasmusen.org. This paper: http://www.rasmusen.org/papers/oddeven-rasmusen.pdf.

If a monopolist (any manufacturer with downward-sloping demand) cannot commit to a wholesale price in advance, even competitive retailers will be reluctant to enter the market, knowing that once they have entered, the monopolist has incentive to choose a higher price and reduce their quasi-rents. Retailers earn zero profits in the long run, but this hurts the monopolist by shifting in the retailer short-run supply curve. I call this inefficiently high price "competitive hold-up". A similar problem occurs if the monopolist's product is sold directly to consumers but is complementary to a product sold by a competitive industry. Competitive hold-up arises from upstream opportunism, not downstream market power, and so is distinct from two problems that look superficially similar, double marginalization and the two-monopoly complements externality.

Many observers suggest that American citizens sue more readily than citizens elsewhere, and that American judges shape society more powerfully than judges elsewhere. We examine the problems involved in exploring these questions quantitatively. The data themselves indicate that American law’s notoriety does not result from how we handle routine disputes. Instead, it results from the peculiar and dysfunctional way American courts handle particular legal doctrines like class actions.

What is law and why do people obey it? This question from jurisprudence has recently been tackled using the tools of economics. The field of law and economics has long studied how fines and imprisonment affect behavior. Nobody believes, however, that all compliance is motivated by penalties, and it is questionable whether that is even the typical motivation. Two books published in 2015, Frederick Schauer's The Force of Law and Richard McAdams's The Expressive Powers of Law: Theories and Limits, consider alternative motivations-Schauer skeptically and McAdams more sympathetically. While coercion, either directly or in support of internalized norms, seems to dominate law qua law (and not as a mere expression of morality), a considerable portion of law serves other uses such as coordination, information provision, expression, and reduction of transaction costs.

Why do some countries produce higher quality goods than other countries? This paper suggests that one reason is self-perpetuating reputations, modelling the idea with a Klein–Leffler reputation model embedded in a general equilibrium model of trade. Reputation differences are particularly interesting because reputation is a form of “social capital”. Like product differentiation, it can explain why countries might trade even if their technologies and endowments are identical, why firms could profit from exports even if the foreign price is no higher than the domestic one, and why governments like to have “high-value” sectors. Ideally, a developing country would shift its own producers to a high-quality equilibrium; if that is not possible, the next best thing is to import experience goods and substitute to home production of goods for which reputation is not important.

Immigration increases the income of native capital more than it reduces the income of native labor, although the transfer of income from labor to capital is a much bigger effect. Free trade often does this too. Even aside from possible negative externalities and public finance costs to natives, however, immigration is different because if the aggregate production function has diminishing returns to private capital and labor the conclusion of increased overall income can easily be reversed. Such a production function is plausible because public capital — government capital and social capital — is unpriced and fixed, with immigrant labor receiving a portion of its benefit. Thus, even aside from fiscal effects and social externalities, whether the total income of natives rises or falls with immigration is open to doubt.

The Klein–Leffler model explains how fear of reputation loss can induce firms to produce high‐quality experience goods. This paper shows that reputation can be leveraged across products via umbrella branding, but only by a firm with a monopoly on at least one product. Such a firm may be able to capture a market by using umbrella branding to make high quality credible at a lower price than the incumbent competitive firms. If monopolists compete for this capture, consumers are left better off than if the market remained competitive, in some cases even though the price increases.

A requirements contract is a form of exclusive dealing in which the buyer promises to buy only from one seller if he buys at all. This paper models a most common-sense motivation for such contracts: that the buyer wants to ensure a reliable supply at a pre-arranged price without any need for renegotiation or efficient breach. This requires that the buyer be unsure of his future demand, that a seller invest in capacity specific to the buyer, and that the transaction costs of revising or enforcing contracts be high. Transaction costs are key, because without them a better outcome can be obtained with a fixed-quantity contract. The fixed-quantity contract, however, requires breach and damages. If transaction costs make this too costly, an option contract does better. A requirements contract has the further advantage that it evens out the profits of the seller across states of the world and thus allows for an average price closer to marginal cost.

The standard estimator of the population mean is the sample mean, which is unbiased. Constructing an estimator by shrinking the sample mean results in a biased estimator, with an expected value less than the population mean. On the other hand, shrinkage always reduces the estimator's variance and can reduce its mean squared error. This paper tries to explain how that works. I start with estimating a single mean using the zero estimator and the oracle estimator, and continue with the grand-mean estimator. Thus prepared, it is easier to understand the James-Stein estimator, in its simple form with known homogeneous variance and in extensions. The James-Stein estimator combines the oracle estimate's coefficient shrinking with the grand mean estimator's cancelling out of overestimates and underestimates.

A requirements contract is a form of exclusive dealing in which the buyer promises to buy a particular product only from one seller. This paper models a common-sense motivation for such contracts: that the buyer wants to ensure a reliable supply at a pre-arranged price without the need for renegotiation. The model requires that the buyer be unsure of his future demand, that a seller make an investment specific to the buyer, and that the transaction costs of revising or enforcing contracts be high. Transaction costs are key, because without them a better outcome can be obtained with a fixed-quantity contract. The fixed-quantity contract, however, can result in breach. If transaction costs make efficient breach too costly, option and requirements contracts have the advantage of not inducing inefficient performance. A requirements contract has the further advantage that it balances the profits of the seller across states of the world and thus allows for an average price closer to marginal cost.