The model developed here explains differences in the degree of the division of labor across local markets. For example, the typical doctor in one local market may treat a wider range of patients' problems than his counterpart in another local market. The extent of the division of labor depends on variables affecting the local demand for services. Two different forms of worker organization, cooperation and noncooperation, yield divergent results. For example, specialization increases with the local number of producers under cooperation but may decrease under noncooperation. With the number of producers constant, local demand variables affect individual specialization under noncooperation but not under cooperation.

A market composed of pairwise trading under incomplete information is modeled in order to analyze how resources are allocated among competing uses when information about trade gains is incomplete. Contrary to the results from studying a single such trade, sufficient homogeneity across potential trades guarantees that efficiency obtains. This is analogous to simple first-price auctions with homogeneous bidders, where bidders have a common bid function and, as a result, the high bidder also places the highest value on the auctioned object. With enough symmetry, the decentralized bilateral trades in the present model occur as if they were made in a first-price auction that occurs through time. The robustness of the efficiency result to heterogeneities among agents and to nontrivial search intensity decisions is then considered.

This paper reports empirical evidence of systematic cross-locale variation in the degree of division of labor among physicians. A theoretical model--based on an individual producer's trade-off between increasing returns and falling marginal revenue within each activity--motivates the empirical tests. At two levels of aggregation, specialization is correlated with local demand shifters for medical services. At the individual level, I find systematic differences in the range of procedures performed within a specialty class. General practitioners working fewer hours, practicing in more populated counties, or practicing in countries with more elderly produce a narrower range of procedures.

[A market composed of pairwise trading under incomplete information is modeled in order to analyze how resources are allocated among competing uses when information about trade gains is incomplete. Contrary to the results from studying a single such trade, sufficient homogeneity across potential trades guarantees that efficiency obtains. This is analogous to simple first-price auctions with homogeneous bidders, where bidders have a common bid function and, as a result, the high bidder also places the highest value on the auctioned object. With enough symmetry, the decentralized bilateral trades in the present model occur as if they were made in a first-price auction that occurs through time. The robustness of the efficiency result to heterogeneities among agents and to nontrivial search intensity decisions is then considered.]

[When changing jobs is costly, efficient employment contracts usually fail to compensate workers for the effects of posthiring events and decisions. Then, when there are executives and managers with authority to make discretionary decisions, affected employees will be led to waste valuable time trying to influence their decisions. Efficient organization design counters this tendency by limiting the discretion of decisions makers, especially for those decisions that have large distributional consequences but that are otherwise of little consequence to the organization.]

-This paper develops estimates of the internal costs (measured in terms of foregone current output) associated with the introduction of new plant and equipment into manufacturing establishments, using the Census Bureau's Longitudinal Establishment Data file, a very large and rich source of production and investment data. Our estimates provide strong support for the internal-adjustment-costs hypothesis; they indicate that one-dollar increases in expansion and replacement investment cause, on the average, 35and 21-cent reductions, respectively, in current output. The internal cost of adjusting to equipment appears to be higher than the cost of adjusting to plant.

[This paper examines the issue of model specification in cross-sectional capital market research. In particular, it is argued that the decision of whether to select a price level or price change (return) specification is a joint function of (1) the economic model of equilibrium that is assumed; and (2) the nature of the econometric properties of the data that cause OLS assumptions to be violated. The historical origins of the model specification debate are traced to focus on three compelling reasons for selecting a returns-based methodology. We conclude that the relative advantages of returns and levels methodologies are dependent upon the set of assumptions maintained by the researcher regarding the pricing relation and the econometric properties of the data used for estimation. We provide examples and an interpretation of extant accounting capital market research to help illustrate our conclusions.]

The paper reports on an experimental investigation of four methods of allocating public goods. The two basic processes studied are direct contribution and a public goods auction process. Both of these processes are studied with and without an additional unanimity feature. The results suggest that the auction process outperforms direct contribution. The effect of unanimity is to decrease the efficiency of both processes. Much of the paper is focused on an analysis of these results.

This paper extends financial option theory by developing a methodology for the valuation of claims on a real asset: an offshore petroleum lease. Several theoretical and practical problems, not present in applying option pricing theory to financial assets, are addressed. Most importantly, we show the necessity of combining option pricing techniques with a model of equilibrium in the market for the underlying asset (petroleum reserves). The advantages of this approach over conventional discounted cash flow techniques are emphasized. The methodological development provides important insights for both company behavior and government policy. Promising empirical results are reported.