The Air Bag/Seat Belt Controversy: How the States Voted

In the late 1980s, a frustrated effort by federal regulators to require auto producers to mandate air-bag equipped cats, the Secretary of Transportation called on the states to settle the issue. The states were told to establish mandatory seat belt laws. If state voters failed to provide seat-belt protection for two-thirds of the nation's population, passive restraints (air bags) would be mandated. The resulting votes provide an opportunity to examine two Public Choice theories. Conventional theory claims that economic interests will prevail in determining outcomes. The newer theory of expressive voting claims that voters will support popular icons, like auto safety, instead of voting on narrow economic grounds. This article examines the votes and tests these two theories. The conventional interpretation is the most robust.Protection; Voter; Votes

Financial Markets and the AT&T Antitrust Settlement

The 1984 Justice Department settlement with AT&T marked one of the largest antitrust action in the nation's history. At the end of the process major changes were made in the original settlement proposal. Investors in affected industries behaved as if they were assessing these changes. Portfolio values of AT&T, its direct competitors, and firms in fields AT&T would enter were affected. As the settlement was made final, financial markets evidence indicates changes in abnormal returns for affected firms.Financial Markets