Choice under Uncertainty: Problems Solved and Unsolved

By Mark J. Machina

Journal of Economic Perspectives, Summer 1987

Fifteen years ago, the theory of choice under uncertainty could be considered one of the "success stories" of economic analysis: it rested on solid axiomatic foundations, it had seen important breakthroughs in the analytics of risk, risk aversion, and the...

Evaluating Uncertain Evidence with Sir Thomas Bayes: A Note for Teachers

By Steven C. Salop

Journal of Economic Perspectives, Summer 1987

Consider the following problem: On the night of March 1, 1986, in Lorain, Ohio, John Doe was struck by a speeding taxi as he crossed the street. The taxi was driving the wrong way down a one-way street and did not stop. An eyewitness thought that the taxi...

The Economic Revolution in the American South

By Gavin Wright

Journal of Economic Perspectives, Summer 1987

As recently as twenty-five years ago, regional economic backwardness in the states of the traditional American South was considered an intractable problem of continuing national concern. Obviously, much has changed since then. The modern period of economi...

Should the American Economic Association Have Toasted Simon Newcomb at Its 100th Birthday Party?

By William J. Barber

Journal of Economic Perspectives, Summer 1987

Should the American Economic Association have toasted Simon Newcomb at its 100th birthday party? Some might be inclined to dismiss the question posed above as preposterous. He was never a member of the American Economic Association. Indeed, the moving spi...

Economic Puzzles: Noisy Prisoners, Manhattan Locations, and More

By Barry Nalebuff

Journal of Economic Perspectives, Summer 1987

Each "Puzzles" will begin with a few speed problems. These puzzles have answers provided in the same issue. Puzzles 1 and 2 will give you a chance to get up to speed. Then, we continue with longer puzzles taken from two very broadly defined categories: st...

Recommendations for Further Reading

By Bernard Saffran

Journal of Economic Perspectives, Summer 1987

Anomalies: The January Effect

By Richard H. Thaler

Journal of Economic Perspectives, Summer 1987

This feature will report successful searches for disconfirming evidence -- economic anomalies. As suggested by Thomas Kuhn, an economic anomaly is a result inconsistent with the present economics paradigm. Economics is distinguished from other social scie...

Foreword

By Joseph Stiglitz, Carl Shapiro, and Timothy Taylor

Journal of Economic Perspectives, Summer 1987

Front Matter

Journal of Economic Perspectives, Summer 1987

Symposium on Mergers and Antitrust

[Symposium: Horizontal Mergers and Antitrust]

By Steven C. Salop

Journal of Economic Perspectives, Fall 1987

The Journal asked three mainstream industrial organization economists to comment on both current merger enforcement and merger reform proposals: Lawrence White, Franklin Fisher, and Richard Schmalensee. The Journal of Economic Perspectives

Antitrust and Merger Policy: A Review and Critique

[Symposium: Horizontal Mergers and Antitrust]

By Lawrence J. White

Journal of Economic Perspectives, Fall 1987

This review will consider the Department of Justice Merger Guidelines of the 1980s, discussing market definition, market share concentration and entry conditions, consideration of other market characteristics, and cost efficiencies. It will also assess th...

Horizontal Mergers: Triage and Treatment

[Symposium: Horizontal Mergers and Antitrust]

By Franklin M. Fisher

Journal of Economic Perspectives, Fall 1987

The pursuit of any sort of structural policy towards oligopoly presupposes that we can recognize anticompetitive structures when we see them. Unfortunately, that requisite is not easy to meet, and there is a temptation to avoid difficult analysis in favor...

Horizontal Merger Policy: Problems and Changes

[Symposium: Horizontal Mergers and Antitrust]

By Richard Schmalensee

Journal of Economic Perspectives, Fall 1987

Most knowledgeable economists seem now to agree that the Department of Justice, the Federal Trade Commission, and the courts were excessively hostile to horizontal mergers in the 1960s. There also seems to be widespread agreement that the 1984 Merger Guid...

The Arbitrage Principle in Financial Economics

[Symposium: Arbitrage]

By Hal R. Varian

Journal of Economic Perspectives, Fall 1987

The importance of arbitrage conditions in financial economics has been recognized since Modigliani and Miller's classic work on the financial structure of the firm. They showed that if a firm could change its market value by purely financial operations su...

Derivative Assets Analysis

[Symposium: Arbitrage]

By Mark Rubinstein

Journal of Economic Perspectives, Fall 1987

Derivative assets analysis enjoys an unusual status; it is a recently developed, relatively complex tool of economic analysis, faithful to the core of economic theory, and widely used to make real-life decisions. This paper, discusses derivative assets ba...

The Making of an Economist

By David Colander and Arjo Klamer

Journal of Economic Perspectives, Fall 1987

As economists, we have an interest in and individual knowledge of the initiation process that turns students into professional economists. However, other than anecdotal evidence, very little in the way of data exists. This paper is a step toward providing...

Information and the Coase Theorem

By Joseph Farrell

Journal of Economic Perspectives, Fall 1987

Some economists think the Coase theorem implies a lot about the proper scope of government intervention in the economy and about the welfare consequences of laissez-faire. Others see it as a mere tautology: that if people negotiate efficiently then every ...

Is Free Trade Passe?

By Paul R. Krugman

Journal of Economic Perspectives, Fall 1987

If there were an Economist's Creed, it would surely contain the affirmations "I understand the Principle of Comparative Advantage" and "I advocate Free Trade." Yet the case for free trade is currently more in doubt than at any time since the 1817 publicat...

In Honor of Nobel Laureate, Franco Modigliani

By Robert C. Merton

Journal of Economic Perspectives, Fall 1987

When Gary Becker asked me to introduce Franco Modigliani on this occasion celebrating Franco's Nobel Prize, he noted that, by tradition, the honoree does not speak. It is the introducer who speaks, devoting 30 minutes or so to the laureate's chief contrib...

Puzzles: Choose a Curtain, Duel-ity, Two Point Conversions, and More

By Barry Nalebuff

Journal of Economic Perspectives, Fall 1987

In presenting economic puzzles, I have three goals in mind: some puzzles are chosen to stimulate research; others offer examples that will help undergraduate and graduate teaching; all should provide quality distractions during seminars. As usual, this fe...