Time overruns are common in public projects and are not confined to inherently complex tasks. One explanation is that sellers can undergo changes in production costs which generate a value of waiting. Using the real-option approach, we examine the effects of the lack of incentives for on-time delivery on competitive bids for a fixed-price procurement contract. Next, we analyze the effects o…

We test the agency theory of corporate political activity by examining the association between the legality of independent expenditures and antitakeover lawmaking in the USstates. Exploiting changes in state law regarding the use of corporate independent expenditures in the pre-Citizens United era, we estimate that a state ismore likely to pass antitakeover statutes that entrench management whe…

Using civil appeals data on Taiwan�s Supreme Court (TSC), this article revisits the well-known question of whether the �haves� come out ahead in litigations. We first show that the higher-status litigants indeed mobilized stronger legal representation and obtained more victories than the lower-status litigants. However, we submit that that the party capability theory cannot …

Beginning with Serrano v. Priest in 1971, equity-based decisions issued by state supreme courts led to a decrease in cross-district inequality in per pupil expenditures. In subsequent years, more state supreme courts overturned existing systems of public school finance for failing to provide adequate education to students living in poor school districts. Adequacy-based decisions have not p…

Client relationships create value, which employees may try to wrest from their employers by establishing their own firms. If an employer and worker cannot contract on the output and profits of the worker�s prospective new firm, at the beginning of their relationship the employer induces the worker to sign a contract that prohibits him from competing or soliciting the current client in …

We document evidence of corruption in Chinese state asset sales. These sales involved stakes in partially privatized firms, providing a benchmark�the price of publicly traded shares�to measure underpricing. Underpricing is correlated with deal attributes associated with misgovernance and corruption. Sales by �disguised� owners that misrepresent their state ownership to e…

To what extent do politicians reward voters who are members of their own ethnic or racial group? Using data from large cities in the United States, we study how black employment outcomes are affected by changes in the race of the cities� mayors between 1973 and 2004. We find that relative to whites, black employment and labor force participation rise, and the black unemployment rate fa…

This article provides an experimental investigation of third parties� sanctioning behavior, in order to understand whether public officials (e.g., judges, politicians, or regulators), when deciding about top-down interventions aimed at punishing wrongdoers, are sensitive to bottom-up pressure on the part of ordinary citizens, who are the major victims of wrongdoers� behavior. We s…

We show that nonbinding law can have a constraining effect on political leaders, because legal compliance is a costly signal to imperfectly informed voters that the leader is unbiased. Moreover, nonbinding law can also have a liberating effect, enabling some leaders to take action when they otherwise would have done nothing. In addition, we illustrate how voters may face a trade-off between…

This article studies the internal politics of a licensing association with regard to expansion of the licensure and self-regulation. A theoretical model is presented of a professional association that has the power to restrict entry, and yet a majority of its members may prefer to allow entry, even when doing so reduces the total revenue of its members. This may happen due to a conflict of i…