This article investigates the internal governance institutions of violent criminal enterprise by examining the law, economics, and organization of pirates. To effectively organize their banditry, pirates required mechanisms to prevent internal predation, minimize crew conflict, and maximize piratical profit. Pirates devised two institutions for this purpose. First, I analyze the system of piratical checks and balances crews used to constrain captain predation. Second, I examine how pirates used democratic constitutions to minimize conflict and create piratical law and order. Pirate governance created sufficient order and cooperation to make pirates one of the most sophisticated and successful criminal organizations in history. (c) 2007 by The University of Chicago. All rights reserved.

This study seeks to establish the empirical importance of price dispersion due to costly consumer search by examining retail prices for prescription drugs. Posted prices in two geographically distinct markets are shown to vary considerably across pharmacies within the same market, even after one controls for variation due to pharmacy differences. Pharmacy heterogeneity accounts for at most one‐third of the observed price dispersion. The empirical analysis hinges on the observation that consumers’ incentives to price‐shop depend on characteristics of the drug therapy. Cross‐sectional patterns in price distributions across drugs are consistent with the predictions of a search model: prices for repeatedly purchased prescriptions (for which the expected benefits of search are highest) exhibit significant reductions in both dispersion and price‐cost margins.

Inferences about the effects of money on economic activity may depend importantly on the choice of a monetary index because simple-sum aggregates cannot internalize pure substitution effects. This hypothesis is investigated by replicating five recent studies that have challenged an aspect of the "conventional wisdom" about the effects of money on aggregate activity. In four of the five cases, the qualitative inference in the original study is reversed when a simple-sum monetary aggregate is replaced by a Divisia index of the same asset collection. The results are mixed in the fifth case.

Inferences about the effects of money on economic activity may depend importantly on the choice of a monetary index because simple-sum aggregates cannot internalize pure substitution effects. This hypothesis is investigated by replicating five recent studies that have challenged an aspect of the "conventional wisdom" about the effects of money on aggregate activity. In four of the five cases, the qualitative inference in the original study is reversed when a simple-sum monetary aggregate is replaced by a Divisia index of the same asset collection. The results are mixed in the fifth case.

Official measures of poverty in the United States are compiled by the Bureau of the Census by comparing a household's income level to a prespecified threshold. From a theoretical perspective it is more appropriate to evaluate the level of poverty using a consumption-based measure of household welfare. In this paper I evaluate the level of poverty using expenditure data from the Consumer Expenditure Survey. I find that consumption-based poverty rates are much lower than those based on income. The trend in the poverty rate in the United States is sensitive to the price index and equivalence scales used to adjust the poverty thresholds.