The Divergence Between Willingness-To-Pay and Willingness-To-Accept Measures of Value

Do people value commodities more when they own the commodities than when they do not? Although economic models generally presume that economic agents evaluate commodities independently of whether the agents own those commodities or not, an assumption that we term the "basic independence" assumption, researchers in economics and law are starting to doubt that this is true. These doubts about the soundness of the basic independence assumption challenge accepted economic doctrine. Most theoretical and applied models in economics use the basic independence assumption both to predict and assess the operation of markets. And in the relatively new discipline of law and economics, the basic independence assumption produces the Coase Theorem, which is the starting point for much economic analysis of legal rules. In this paper we present, organize, and critique the modern evidence on the basic independence assumption so as to draw together the learning of the economists and the lawyers. We will first investigate the evidence on the divergence between willingness-to-accept and willingness-to-pay measures of value, and then ask about possible explanations for the evidence. Next, we will explore the implications of the divergence for analysis in law and economics. Last, we will show that although the divergence between willingness-to-accept and willingness-to-pay measures of value may entail substantially limiting the role of cost- benefit analysis, we cannot precisely map those limits without answering some difficult questions about the source of the disparity between willingness-to-accept and willingness-to-pay

\u3ci\u3eLeft, Right, and Center\u3c/i\u3e: Strategic Information Acquisition and Diversity in Judicial Panels

This paper develops and analyzes a hierarchical model of judicial review in multimember appellate courts. In our model, judicial panels acquire information endogenously, through the efforts of individual panelists, acting strategically. The resulting equilibria strongly resemble the empirical phenomena collectively known as panel effects – and in particular the observed regularity with which ideological diversity on a panel predicts greater moderation in voting behavior (even after controlling for the median voter\u27s preferences). In our model, non-pivotal panel members with ideologies far from the median have the greatest incentive to acquire additional policy-relevant information where no one on a unified panel would be willing to do so. The resulting information structure pushes deliberation and observed voting patterns towards apparent moderation. We illustrate the plausibility of our model by calibrating it to empirical data, and explore various normative implications of our theory

Willingness-To-Pay vs. Willingness-To-Accept: Legal and Economic Implications,

Do people value commodities more when they own the commodities than when they do not? Although economic models generally presume that economic agents evaluate commodities independently of whether the agents own those commodities--the basic independence assumption researchers in economics and law are starting to doubt whether this assumption is true. Doubts about the soundness of the basic independence assumption challenge accepted economic doctrines. Most theoretical and applied models in economics use the basic independence assumption both to predict and to assess the operation of markets. In the relatively new discipline that combines law and economics, the basic independence assumption produces the Coase Theorem, which is the starting point for much economic analysis of legal rules

What's age got to do with it? Supreme Court appointees and the long run location of the Supreme Court median justice

For approximately the past forty years, Republican Presidents have appointed younger Justices than have Democratic Presidents. Depending on how one does the accounting, the average age difference will vary, but will not go away. This Article posits that Republicans appointing younger justices than Democrats may have caused a rightward shift in the Supreme Court. We use computer simulations to show that if the trend continues the rightward shift will likely increase. We also produce some very rough estimates of the size of the ideological shift, contingent on the size of the age differential. In addition, we show that the Senate’s role in confirming nominated Justices has a significant moderating effect on the shift. Last, we consider the interaction between our results and the oft-proposed eighteen year staggered terms for Supreme Court Justices. We show that such an institutional change would almost completely wipe out the ideological effect of one Party appointing younger Justices

Testing Minority Preferences in Broadcasting

The United States government has several policies and programs designed to increase the number of broadcasting stations owned by racial minorities. Increasing the number of minority-owned broadcasting stations, the government claims, will diversify the content of broadcast programs by increasing the amount of minority-oriented programming. Minority owners will program their stations differently than white owners, the government claims. In this paper we present the first econometric test of these propositions about minority ownership of broadcasting stations as well as a number of other related propositions. We conclude that increasing the number of minority-owned broadcasting stations increases the amount of minority-oriented programming. We also conclude that increasing the number of female-owned stations-a policy that has been ruled unconstitutional would be just as effective at increasing minority-oriented programming

What’s age to do with it? Supreme Court appointees and the long run location of the Supreme Court median justice

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