Wagering markets provide a natural laboratory for testing models of market prices and behavior under uncertainty. The literature on wagering, albeit contentious, has established the following. First, prices set in these markets, to a first approximation, are efficient forecasts of outcomes. Second, price changes in these markets are driven by an informed class of bettors and improve prediction. Nevertheless, there are important departures from generic notions of market efficiency. Recent models focusing on diverse information, heterogeneous agents, and transaction costs help to explain these findings.

Salaries of academic economists are studied to determine if individuals receive differential returns to publishing articles of varying quality and to coauthored versus single-authored articles. Estimates based on detailed data and a flexible nonlinear least-squares procedure indicate that substantial returns to quality exist and that an individual's return from a coauthored paper with n authors is approximately 1/n times that of a single-authored paper.

Salaries of academic economists are studied to determine if individuals receive differential returns to publishing articles of varying quality and to coauthored versus single-authored articles. Estimates based on detailed data and a flexible nonlinear least-squares procedure indicate that substantial returns to quality exist and that an individual's return from a coauthored paper with n authors is approximately 1/n times that of a single-authored paper.

This paper examines the effects of the Federal Trade Commission's Advertising Substantiation Program, developed in the early 1970s. This program coupled changes in the legal definition of deception with more vigorous FTC enforcement. The authors analyze changes in advertising intensity, media choice, media wealth, and the progress of new entrants. The evidence suggests that adoption of substantiation requirements increased the credibility of advertising.

This paper examines the effects of the Federal Trade Commission's Advertising Substantiation Program, developed in the early 1970s. This program coupled changes in the legal definition of deception with more vigorous FTC enforcement. We analyze changes in advertising intensity, media choice, media wealth, and the progress of new entrants. The evidence suggests that adoption of substantiation requirements increased the credibility of advertising.

This paper uses the betting market for professional basketball games to address the issue of unexplained asset price volatility. A pricing model is presented that identifies two components in point spreads for professional basketball games. Both components–the market's estimate of relative team abilities and an idiosyncratic factor–are essentially unobserved but can be identified ex post. The structure of this market enables tests of competing hypotheses about point spread variation. The tests reject the hypothesis that variation in the two components represents irrelevant noise. The hypothesis that unobserved fundamentals account for this variation is consistent with the data.

This paper uses the betting market for professional basketball games to address the issue of unexplained asset price volatility. A pricing model is presented which identifies two components in point spreads for professional basketball games. Both components—the market's estimate of relative team abilities and an idiosyncratic factor—are essentially unobserved, but can be identified ex post. The structure of this market enables tests of competing hypotheses about point spread variation. The tests reject the hypothesis that variation in the two components represents irrelevant noise. The hypothesis that unobserved fundamentals account for this variation is consistent with the data.