delivering bad news market responses to negligence abstractone of the goals of the legal liability system is to ensure that sellers provide appropriate care reputation effects may also deter negligence the little available research evidence suggests that reputation effects are minimal however we develop a theory tailored to an environment such as medicine in which sellers are of heterogeneous quality and face two types of demand private consumers who exhibit downward sloping demand for example private health insurance and government consumers who exhibit perfectly elastic demand at a fixed price for example medicaid insurance the theory predicts that high quality sellers who suffer reputation losses will see their caseloads shift from private to government patients while low quality sellers will lose government patients and may gain private patients combining individual patient level data from florida for the years 1994 2003 with physician level litigation data we find evidence that physicians experience reputation effects that are consist

making the same mistake again or is this time different the world faces an economic crisis of unprecedented proportions but much of the policy response has certainly not lacked for precedent national governments and international organisations including the international monetary fund imf have looked to crises of the past for solutions to the present and austerity has become a familiar theme the inability to effectively resolve the current crisis however gives rise to the question is this time different this article provides a broad overview to the origins and development of the recent economic crisis and the resort to policies of austerity although there is historical precedent for the resort to austerity such as the uk treasury view during the 1920s and 1930s this time things are different many of the current problems are deeply rooted and reflect the impact of the shift towards free market economics that started in the 1970s 2 the origins of the crisis since the beginning of the 1970s the private sector finance in particular has reorganised on an increasingly global scale it has innovated in terms of both structure and products and it has experienced significant growth as tridico 2012 this issue shows this financialisation was characterised by a ballooning of stock exchanges as many firms decided not only to list their shares but also to become involved in speculative finance in response to pressures on firms to maximise shareholder value together with the progressive erosion of worker and trade union rights and influence labour markets became more flexible and real wages stagnated concurrently profits rebounded leading to burgeoning inequality in this context aggregate demand and consumption were bolstered by easy credit and the wealth effects of speculative bubbles first in stocks and shares and then in housing

the role of the media in fiscal consolidation programmes the case of ireland a number of european countries have implemented austerity programmes since the onset of the current economic crisis this paper focuses on fiscal consolidation a central aspect of such programmes using the case of ireland it investigates the significant role of the mass media in presenting such policies to the public a role which has so far remained unexamined conceiving of the irish experience over the past few decades as a case of neoliberalisation it uses a critical political economic conceptualisation of news organisations to consider 431 editorials and opinion articles discussing fiscal consolidation in three leading irish newspapers between 2008 and 2012 it finds that the majority of articles present viewpoints in favour of fiscal consolidation and display a preference for spending cuts over tax hikes which substantiates the claim that ireland has adopted neoliberal policies to address the crisis only a minority of articles oppose fiscal consolidation these mostly contest specific spending cuts but usually fail to criticise fiscal consolidation itself by calling for economic alternatives such as keynesian stimulus differences between newspapers are also discussed highlighting their ideological cleavages

taxes and labor supply of high income physicians abstract we use the 1983 1985 physicians practice costs and income survey supplemented with federal and state tax rates to estimate the effect of variation in marginal tax rates on work hours for high income physicians we find that self employed physicians are much more sensitive to the marginal tax rate than would be suggested by previous labor supply studies while those who are employees have no discernible sensitivity to marginal tax rates

do doctors practice defensive medicine defensive medicine is a potentially serious social problem if fear of liability drives health care providers to administer treatments that do not have worthwhile medical benefits then the current liability system may generate inefficiencies much larger than the costs of compensating malpractice claimants to obtain direct empirical evidence on this question we analyze the effects of malpractice liability reforms using data on all elderly medicare beneficiaries treated for serious heart disease in 1984 1987 and 1990 we find that malpractice reforms that directly reduce provider liability pressure lead to reductions of 5 to 9 percent in medical expenditures without substantial effects on mortality or medical complications we conclude that liability reforms can reduce defensive medical practices

coase versus pacman who eats whom in the durable goods monopoly in standard durable goods monopoly models both the set of buyers and the set of prices are assumed to be continua if the set of buyers is finite the perfectly discriminating monopoly outcome is a unique subgame perfect equilibrium when the seller is sufficiently patient introducing instead a smallest unit of account yields the coasian outcome as a generically unique subgame perfect equilibrium for patient enough buyers a folk theorem is obtained if both sets are finite these results reflect a strategic disadvantage of having to make moves with a large impact on other players payoffs the analysis is extended to durable goods oligopoly

bargaining and strikes strikes are generally regarded as an important economic phenomenon and yet good theoretical explanations of them are hard to come by the difficulty is to understand why rational parties should resort to a wasteful mechanism as a way of distributing the gains from trade why could not both parties be made better off by moving to the final distribution of surplus immediately or if it is uncertain to its certainty equivalent and sharing the benefits from increased production

foundations of dynamic monopoly and the coase conjecture subgame perfect equilibria are characterized for a market in which the seller quotes a price each period assume zero costs positive interest rate continuum of buyers and some technical conditions if buyers valuations are positive then equilibrium is unique buyers strategies are stationary and the price sequence is determinant along the equilibrium path but possibly randomized elsewhere otherwise a continuum of stationary equilibria can exist but at most one with analytic strategies coase s conjecture is verified for stationary strategies reducing the period length drives all prices to zero or the least valuation connections to bargaining models are described journal qf economic literature classification

the impact of liability on the physician labor market abstract this study examines the impact of malpractice reforms on physician behavior using a new measure of liability risk and a nationally representative individual level data set on physician behavior we match our liability measure to data on physician behavior from the physician practice costs and income survey ppcis data from the ppcis bracket a period of substantial state level legal reform between 1983 and 1988 which provides identifying variation in our liability measure we estimate the impact of liability reform on hours worked we find an estimated elasticity of hours worked to liability exposure of 285 for the full sample of physicians the effect for physicians ages 55 or older is much larger we find an elasticity of 1 224 for this category we find that an increase in 1 of expected liability is associated with a 70 1 05 increase in malpractice premiums

when are agents negligible the authors examine the following paradox in a dynamic setting equilibria can be radically different in a model with a finite number of agents than in a model with a continuum of agents they present a simple strategic setting in which this paradox is a general phenomenon however the paradox disappears when there is noisy observation of the players actions and the aggregate level of noise does not disappear too rapidly as the number of players increases the authors give several economic examples in which this paradox has recently received attention durable goods monopoly corporate takeovers and time consistency of optimal government policy copyright 1995 by american economic association

the revenge of the market on the rentiers why neo liberal reports of the end of history turned out to be premature starting from the perspective of heterodox keynesian minskyian kindlebergian financial economics this paper begins by highlighting a number of mechanisms that contributed to the current financial crisis these include excess liquidity income polarisation conflicts between financial and productive capital lack of appropriate regulation asymmetric information principal agent dilemmas and bounded rationalities however the paper then proceeds to argue that perhaps more than ever the macroeconomics that led to this crisis only makes analytical sense if examined within the framework of the political settlements and distributional outcomes in which it had operated taking the perspective of critical social theories the paper concludes that ultimately the current financial crisis is the outcome of something much more systemic namely an attempt to use neo liberalism or in us terms neo conservatism as a new technology of power to help transform capitalism into a rentiers delight in particular into a system without compulsions on big business i e one that imposes only minimal pressures on big agents to engage in competitive struggles in the real economy while doing the opposite to workers and small firms a key component in the effectiveness of this new technology of power was its ability to transform the state into a major facilitator of the ever increasing rent seeking practices of oligopolistic capital the architects of this experiment include some capitalist groups in particular rentiers from the financial sector as well as capitalists from the mature and most polluting industries of the preceding techno economic paradigm some political groups as well as intellectual networks with their allies including many economists and the new left although rentiers did succeed in their attempt to get rid of practically all fetters on their greed in the end the crisis materialised when markets took their inevitable revenge on the rentiers by calling their blatant bluff

malpractice law and health care reform optimal liability policy in an era of managed care abstract because fee for service health insurance insulates providers from the costs of treatment decisions it may lead to defensive medicine precautionary treatment with minimal expected medical benefit administered out of fear of legal liability by giving providers higher powered incentives managed care may affect optimal liability policy among elderly medicare beneficiaries with heart disease in 1984 1994 we find that liability reducing tort reforms reduce defensive practices in areas with high and low managed care enrollment but that managed care and liability reform are substitutes we consider some implications of these results for the current debate over the appropriateness of extending malpractice liability to managed care organizations

the significance of federal taxes as automatic stabilizers using the taxsim model for the period 1962 95 we consider the federal tax system s impact as an automatic stabilizer despite the many changes in the tax system there has been relatively little change in its role as an automatic stabilizer we estimate that individual federal taxes offset perhaps as much as 8 percent of initial shocks to gdp we also suggest that the progressive income tax may help to stabilize output via its effect on the supply of labor an additional effect that may even be of similar magnitude to the more traditional path of stabilization through aggregate demand

social spending and automatic stabilizers in the oecd the macroeconomic literature on automatic stabilization tends to focus on taxes and dismiss the relevance of government expenditure except for unemployment compensation our results go sharply contrary to this view we engage in an empirical analysis of 21 oecd countries from 1982 to 2003 and find that age and health related social expenditure as well as incapacity and sick benefits all react to the cycle in a stabilizing manner while possibly new in the macro literature this conforms to many results in studies in labour economics the policy implications are broad since much previous analysis of discretionary fiscal policy rests on official figures for automatic stabilization there are also major implications for efforts to incorporate automatic fiscal policy in simulation models julia darby and jacques melitz

are malpractice insurance premiums a tort signal that influence physician hours worked abstract this study reports some new evidence on the impact of malpractice insurance costs on physician labor supply behavior a strategy is proposed to test for the existence of malpractice premium tort signal effects on physician hours worked

estimating monopoly behavior with competitive recycling an application to alcoa this article develops a structural model of the aluminum industry during the period between world war i and world war ii it takes into account both the intertemporal nature of alcoa s cost minimization problem and the competitive recycling sector the model enables estimation of alcoa s degree of market power while allowing for the effect of competition from recycled aluminum previous work has emphasized alcoa s control over the size of the secondary sector in the long run as a source of market power for alcoa the results here indicate that alcoa could exert little influence in this regard but nonetheless had substantial market power

durable goods monopoly with discrete demand we analyze a dynamic game between consumers and the sole seller of a durable good unlike previous analyses we assume that there exists a finite collection of buyers rather than a continuum none of the main conclusions of the literature on durable goods monopoly survives this change in assumption coase s conjecture that a durable goods monopolist cannot earn supracompetitive profits in the continuous time limit bulow s proposition that renting a durable is always more profitable than selling it and stokey s proposition that precommitting to a time path of prices is always optimal are all false when the set of buyers is finite thus the assumption of a continuum of consumers so innocuous and useful a simplification in other contexts has proved misleading in the context of durable goods monopoly

durable goods coasian dynamics and uncertainty theory and experiments this paper presents a model in which a durable goods monopolist sells a product to two buyers each buyer is privately informed about his own valuation thus all players are imperfectly informed about market demand we study the monopolist s pricing behavior as players uncertainty regarding demand vanishes in the limit in the limit players are perfectly informed about the downward sloping demand we show that in all games belonging to a fixed and open neighborhood of the limit game there exists a generically unique equilibrium outcome that exhibits coasian dynamics and in which play lasts for at most two periods a laboratory experiment shows that consistent with our theory outcomes in the certain and uncertain demand treatments are the same median opening prices in both treatments are roughly at the level predicted and considerably below the monopoly price consistent with coasian dynamics these prices are lower for higher discount factors demand withholding however leads to more trading period

the macroeconomic stabilisation effects of social security and 401 k plans this paper investigates how various retirement institutions impact the macroeconomy we find that for every 1 percentage point increase in the output gap net flows of various government programmes including social security decrease by 0 34 percentage points while net flows of 401 k plans increase by 0 05 percentage points in levels for every 1 increase in real gross domestic product net flows from various government programmes shrink by 45 cents whereas net flows from 401 k plans increase by 4 6 cents in other words 401 k plans reduce the automatic stabilisation impact of government programmes by 10 15 moreover we find that social security has a net negative effect on household consumption while 401 k retirement accounts work the opposite way in fact the destabilising effect of 401 k plans on consumption is twice as strong as the one attributed to social security these results highlight a significant problem with 401 k retirement plans and any retirement plan that is dependent on financial markets copyright the author 2012 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press