A dynamic general equilibrium model is developed in which goods are valued according to the characteristics they contain, the set of goods produced in any period is endogenously determined, and learning by doing is the force behind sustained growth. It is shown that the set of produced goods changes in a systematic way over time, with goods of higher quality entering each period and those of lower quality dropping out. The model is then used to study the effect of introducing a "traditional" sector in which there is no learning.

If an increase in the rate at which a criminal commits crimes lowers the expected time until detection, the income from crime (net of expected fines) must be discounted at a rate that varies with the crime rate. This paper models the criminal's choice of the optimal crime rate under such conditions. It is shown that, irrespective of the criminal's attitude toward risk, an increase in the probability of detection is more likely to deter crime than a comparable increase in penalties. Other implications of the model for the optimal enforcement of laws are also explored.

If an increase in the rate at which a criminal commits crimes lowers the expected time until detection, the income from crime (net of expected fines) must be discounted at a rate that varies with the crime rate. This paper models the criminal's choice of the optimal crime rate under such conditions. It is shown that, irrespective of the criminal's attitude toward risk, an increase in the probability of detection is more likely to deter crime than a comparable increase in penalties. Other implications of the model for the optimal enforcement of laws are also explored.

This paper reports experimental tests of three search equilibrium models. These models which differ only in the search strategies available to the buyers have qualitatively different predictions, that is, equilibria: price distributions, single price equilibria at the competitive price and at the monopoly price and two price equilibria. The experimental outcomes generally were consistent with the models' predictions. This suggests that debate on the utility of this class of models should shift to the realism of the models' assumptions rather than focus on their ability to characterize market outcomes. Also, since the basic models have been validated, the project of analysing experimentally the results of relaxing some of their assumptions seems worthwhile.

[The paper derives the essential elements of tax systems as the outcome of rational behavior in a model where government maximizes expected support and where opposition to taxation depends on the loss in full income. The analysis treats the level of expenditures as endogenous and integrates the influence of administration costs with that of political and economic factors. Tax structure is shown to be a system of related components in equilibrium.]

This paper studies the association between a firm's stock returns and subsequent top management changes. Consistent with internal monitoring of management, there is an inverse relation between the probability of a management change and a firm's share performance. This relation can result from monitoring by the board, other top managers, or blockholders. However, unless share performance is extremely good or bad, logit models have no predictive ability. No average stock price reaction is detected at announcement of a top management change.

While most takeover models assume atomistic stockholders, we analyze a single-raider model with finitely many stockholders. Because the raider can always make some stockholders pivotal, he can overcome the free-rider problem identified by Grossman and Hart (1980) and others in atomistic-stockholder models and profitably take over even without exclusion. One might expect that it would be harder for the raider to make stockholders of more widely held firms pivotal and that exclusion would thus become necessary; however, the infinite-stockholder game cannot yield this conclusion. We also consider the limit of the finite-stockholder game and give conditions under which exclusion is unnecessary. Finally, we show that exclusion leads to the possibility of inefficient takeovers.