In 1839 the French government purchased the Daguerreotype patent and placed it in the public domain. Such patent buyouts could potentially eliminate the monopoly price distortions and incentives for rent-stealing duplicative research created by patents, while increasing incentives for original research. Governments could offer to purchase patents at their estimated private value, as determined in an auction, times a markup equal to the typical ratio of inventions' social and private value. Most patents purchased would be placed in the public domain, but to induce bidders to reveal their valuations, a few would be sold to the highest bidder.

Some commentators argue that increased sorting into internally homogeneous neighborhoods, schools, and marriages is radically polarizing society. Calibration of a formal model, however, suggests that the steady-state standard deviation of education would increase only 1.7 percent if the correlation between neighbors' education doubled, and would fall only 1.6 percent if educational sorting by neighborhood disappeared. The steady-state standard deviation of education would grow 1 percent if the correlation between spouses' education increased from 0.6 to 0.8. In fact, marital and neighborhood sorting have been stable, or even decreasing historically. Sorting has somewhat more significant effects on intergenerational mobility than on inequality.

Increased HIV risk creates incentives for people with low sexual activity to reduce their activity, but may make high-activity people fatalistic, leading them to reduce their activity only slightly, or actually increase it. If high-activity people reduce their activity by a smaller proportion than low-activity people, the compo-sition of the pool of available partners will worsen, creating positive feedbacks, and possibly multiple steady states. Early public health efforts may allow socie-ties to reach more favorable steady states. Nearly 18 million people have been infected by HIV [WHO 1995], the majority through heterosexual transmission in devel-oping countries. Prevalence among 30- to 40-year-olds in some districts of Uganda is 40 percent [Barnett and Blaikie 1992], and prevalence among prostitutes in Nairobi reached 80 percent by 1987 [Over and Piot 1993]. 1 Surveys of sexual activity and epidemiological models sug-gest that the behavior of a small group of highly sexually active people is critical to the spread of the epidemic [Hethcote and Yorke 1984; Over and Piot 1993]. However, most epidemiological models treat behavior as independent of prevalence. This may be in part because there are little data on how prevalence affects the rate of partner change, and in part because the available evi-dence suggests that people have reacted differently to the epi-demic. Although some people have adopted safer behavior in response to increased prevalence [McKusick et al. 1985; Ahituv, Hotz, and Philipson 1993], there is anectodal evidence of fatalism among some TV drug users and homosexuals in developed coun-tries, and prostitution has continued at high levels in parts of Africa and Asia. 2 This paper integrates formal analyses of behavioral choice and epidemiological dynamics in heterogeneous populations. Un-surprisingly, increases in the probability of infection from an additional partner will create incentives for people with low sex-

The nonrivalry of technology, as modeled in the endogenous growth Uterature, implies that high population spurs technological change. This paper constructs and empirically tests a model of long-run world population growth combining this implication with the Malthusian assumption that technology limits population. The model predicts that over most of history, the growth rate of population will be proportional to its level. Empirical tests support this prediction and show that historically, among societies with no possibility for technological contact, those with larger initial populations have had faster technological change and population growth.

This paper proposes a production function describing processes subject to mistakes in any of several tasks. It shows that high-skill workers—those who make few mistakes—will be matched together in equilibrium, and that wages and output will rise steeply in skill. The model is consistent with large income differences between countries, the predominance of small firms in poor countries, and the positive correlation between the wages of workers in different occupations within enterprises. Imperfect observability of skill leads to imperfect matching and thus to spillovers, strategic complementarity, and multiple equilibria in education.

Under central planning, many firms relied on a single supplier for critical inputs. Transition has led to decentralized bargaining between suppliers and buyers. Under incomplete contracts or asymmetric information, bargaining may inefficiently break down, and if chains of production link many specialized producers, output will decline sharply. Mechanisms that mitigate these problems in the West, such as reputation, can only play a limited role in transition. The empirical evidence suggests that output has fallen farthest for the goods with the most complex production process, and that disorganization has been more important in the former Soviet Union than in Central Europe.

We use a randomized evaluation of a Kenyan deworming program to estimate peer effects in technology adoption and to shed light on foreign aid donors' movement towards sustainable community provision of public goods. Deworming is a public good since much of its social benefit comes through reduced disease transmission. People were less likely to take deworming if their direct first-order or indirect second-order social contacts were exposed to deworming. Efforts to replace subsidies with sustainable worm control measures were ineffective: a drug cost-recovery program reduced take-up 80 percent; health education did not affect behavior, and a mobilization intervention failed. At least in this context, it appears unrealistic for a one-time intervention to generate sustainable voluntary local public goods provision.