Workers with high seniority usually have higher wages than workers with low seniority and the same total labor-market experience. In contrast, the results of this paper indicate that for university professors higher seniority is associated with lower salaries. I document this finding for national surveys and individual institutions and explain it as due to monopsonistic discrimination by employers.

This paper argues that default plays an important positive role in the economy. If markets are incomplete and traders are only able to enter into contracts that they will be able to execute regardless of future events, contingent contracting may be severely restricted. Moreover, opening new markets may not relieve these restrictions. Default promotes efficiency in a way that opening new markets does not, by making it possible for traders to enter into contracts that they will be able to execute with high probability, but not with certainty.

R. Ian Domowitz, Glenn Hubbard, and Bruce C. Peterson (1988) estimate industry markups of price over marginal cost and show the influence of market structure on cyclical movements in total factor productivity, using a disaggregate panel data set of 284 four-digit, Standard Industrial Classification industries. In this comment, the authors examine whether Domowitz, Hubbard, and Peterson really estimate what they intend to estimate. Domowitz, Hubbard, and Peterson also claim their 'estimates are not as large as those of Hall.' If it is not clear what they estimate, the comparison is of limited usefulness. Nevertheless, the Domowitz, Hubbard, and Peterson study deserves consideration and contemplation by anyone interested in industrial economics.

The authors develop a new economic framework for the empirical analysis of retail margins. This framework formalizes the role of distribution services as outputs of retail activities. Their main results are the following: the measures of outputs of retail activities identified in the data perform as important and robust determinants of retail margins; variables that purport to capture oligopolistic features of market structure play a limited or no role in determining retail margins; quantity setting and price setting under the assumptions of profit maximization and monopolistic competition are categorically rejected by the data. The data base is information on 49 retail sectors from the 1982 U.S. Census of Retail Trades.

The possibility of sunspot equilibria and endogenous cycles are explored in a two-sector overlapping-generations model with entry. It is shown that if prospective entrants act oligopolistically as producers but competitively as consumers then a strategic complementarity between the entry decisions of agents across sectors and across time may arise. If the complementarity is sufficiently strong, the economy will have multiple, Pareto-ranked steady states. Stationary sunspot equilibria can then be constructed as a randomization between allocations in the neighbourhood of the multiple steady states providing a source of aggregate fluctuations.