Making a transfer in kind reduces its value to recipients but can improve targeting. We develop an approach to quantifying this tradeoff and apply it to home care. Using randomized experiments by Medicaid, we find that in-kind provision significantly reduces the value of the transfer to recipients while targeting a small fraction of the eligible population that is sicker and has fewer informal care-givers than the average eligible. Under a wide range of assumptions within a standard model, the targeting benefit exceeds the distortion cost. This highlights an important cost of recent reforms toward more flexible benefits. (JEL D82, H51, H75, I18, I38)

Multinationals in the extractive sectors of weak states face resource theft by armed groups. Criminality is often abetted by state corruption, even though firms are willing to pay for protection. I study indigenization in Nigeria’s oil sector, which increased local firms’ participation substantially. Despite lower quality, local firms increase output by reducing oil theft. A bargaining model illustrates that political connections align law enforcement incentives, solving commitment problems. Data on law enforcement raids show that local firms receive preferential protection. Connections to military elites drive the local advantage. The aggregate gains from indigenization are at most between 2.3 and 5.7 percent of GDP. (JEL D73, F23, L71, O13, O17, Q34, Q35)

Despite facing significant uncertainty about their lifespans and health care costs, most retirees do not buy annuities or long-term care insurance. In this paper, I find that retirees’ saving and insurance choices are highly inconsistent with standard life-cycle models in which people care only about their own consumption but match well models in which bequests are luxury goods. Bequest motives tend to reduce the value of insurance by reducing the opportunity cost of precautionary saving. The results suggest that bequest motives significantly increase saving and significantly decrease purchases of long-term care insurance and annuities.

In a comment, Okamoto (2018 ) identifies and corrects a misspecification of the rationing rule in Ausubel (2004 ). This reply elaborates on the observation that the optimality of truthful bidding in dynamic auctions may be sensitive to the fine details of the rationing rule. It then discusses the wider role of sequential bid processing in restoring truthful bidding. (JEL D44)

It is often argued that efficiency considerations require society to freely permit insider trading. In this article, an opposing efficiency argument is formalized. The model incorporates an investment stage followed by a trading stage. If "outsiders" expect "insiders" to take advantage of them in trading, outsiders will reduce their investment. The insiders' loss from this diminished investor confidence may more than offset their trading gains. Consequently, a prohibition on insider trading may effect a Pareto improvement. Insiders are made better off if they can precommit not to trade on their privileged information; government regulation accomplished exactly this. Copyright 1990 by American Economic Association.