Supermajority Rules and the Swing Voter's Curse

The Swing Voter's Curse is extended to incorporate a class of supermajority rules.abstention, strategic voting, supermajority rules, swing voter's curse

Replacement Referees and NFL Betting Markets

Are betting markets efficient? The 2012 labor dispute between the NFL and the referees is used as a quasi-experiment to assess whether the betting markets are able to achieve accurate “prices” in an uncertain environment. More points were scored and underdogs performed relatively better resulting in upsets and closer-than-expected games. Betting markets, though, were unable to anticipate or adjust to this systematic effect even though irregularities in gambling markets were reported before the beginning of the season. Not only were they inefficient, but profitable betting strategies can be identified

CONSUMER MISTAKES IN BERTRAND GAMES

The identical agent, identical good Bertrand game is associated with prices at marginal cost — the Bertrand Paradox. If consumers make occasional mistakes I show that the standard Bertrand game gives rise to positive profits and prices above marginal cost. Some firms charge low prices to capture the bulk of the sales while others charge high prices selling to mistaken consumers. Furthermore, with free entry the Diamond Paradox arises; a full measure of the firms choose the monopoly price. As a result, the Diamond Paradox arises in an environment with zero search costs by replacing searching costs with searching errors.Bertrand game, Bertrand Paradox, consumer mistakes, Diamond Paradox, price dispersion

The median juror and the trial of Socrates

A model of the mechanism used by the Classical Athenians to prosecute Socrates is presented. Two important features of such trials are, first, both the prosecutor and the defendant propose sanctions and, second, a jury takes a simple majority vote over the two proposals. The Classical Athenians created a mechanism to achieve a median-juror result. This sanction is a Condorcet Winner among all possible sanctions, responds to both the harm of the act and the uncertainty of guilt, and, under reasonable conditions, improves deterrence resulting in fewer crimes being committed.Deterrence Jury decision making Median juror Sanction Socrates

Homicide trials in Classical Athens

Homicide trials in Classical Athens had a unique feature. After the initial evidence was presented the defendant was given the option to go into a self-imposed exile for life losing all protections, rights, and wealth. If the defendant did not go into exile, then the trial continued with additional arguments presented. If the judges voted to convict, the sanction of death was imposed. Given the limited set of feasible sanctions available to the Athenians, it is argued that this institution is effective as it separates some guilty from the innocent. Consequently, fewer innocent are convicted and more guilty are punished.Classical Athens Exile Homicide Jury decisionmaking Sanction

An Economic Theory of College Alcohol and Drug Policies

Colleges employ a wide variety of policies to regulate alcohol and drug use. A model where a regulator monitors the activity of a heterogeneous population of individuals is presented. Engaging in the activity is desired by each, but the aggregate activity exhibits a negative externality. The regulator is unable to observe the quantity or propensity for the activity of any individual, but can establish a maximum acceptable amount of activity and imperfectly monitor compliance with the standard. In this environment the choices made, the need for regulation, and imperfect monitoring are investigated to show that effective policy depends on the goal of the regulator.