Optimal Fines under Announced and Surprise Inspections

This paper examines optimal fines in a regulatory framework where the regulator can choose either surprise or announced inspections to monitor a firm for compliance. The firm can invest in detection avoidance, but it receives a fine if the regulator discovers that it is noncompliant. In the welfare maximization problem, we focus on the trade‐off between the frequency of inspections and the magnitude of the fine. We find that when inspections are unannounced, the optimal fine is maximal, but when they are announced, the optimal fine may be less than maximal.     

What Determines Research Output of Academic Economists?

This paper looks at the characteristics that explain research productivity in a cross section of academic economists. From a sample of 150 economists, we obtained data on a range of human capital variables, teaching loads and research funding. The results suggest that human capital variables, particularly the grade of honours and the nature and location of the PhD., are especially important in explaining a quality-weighted research output measure. Teaching loads are also significant. In particular, we find that a 10 per cent increase in the number of teaching hours may reduce research output by as much as 20 per cent, whereas a 10 per cent increase in the number of grants held per year may raise output per year by as much as 15 per cent.     

Optimal Incentives with State‐Dependent Preferences

In both experimental and natural settings, incentives sometimes underperform, generating smaller effects on the targeted behaviors than would be predicted for entirely self‐regarding agents. A parsimonious explanation is that incentives that appeal to self‐regarding economic motives may crowd out noneconomic motives such as altruism, reciprocity, intrinsic motivation, ethical values, and other social preferences, leading to disappointing and sometimes even counterproductive incentive effects. We present evidence from behavioral experiments that crowding may take two forms: categorical (the effect on preferences depends only on the presence or absence of the incentive) or marginal (the effect depends on the extent of the incentive). We extend an earlier contribution (Bowles and Hwang, 2008 ) to include categorical crowding, thus providing a more general framework for the study of optimal incentives and as a result, an expanded range of situations for which the sophisticated planner will (surprisingly) make greater use of incentives when incentives crowd out social preferences than when motivational crowding is absent.     

Conscientiousness,Financial Literacy,and Asset Accumulation of Young Adults

This study utilizes the 1997 National Longitudinal Survey of Youth to examine the relationship between financial literacy, conscientiousness, and asset accumulation among young adults. Findings indicate that both conscientiousness and financial literacy are consistent predictors of asset accumulation among young Americans. A one‐standard‐deviation increase in conscientiousness is correlated with a 40% increase in net worth, a 53% increase in illiquid asset holdings, and a 33% increase in liquid asset holdings. A one‐standard‐deviation increase in financial literacy is correlated with a 60% increase in illiquid asset holdings and a 30% increase in liquid asset holdings. Financial literacy moderates the effect of conscientiousness on net worth. These findings suggest that conscientiousness and financial literacy are important factors and that policies and programming with a dual emphasis on increasing conscientiousness and financial literacy are likely to have a positive impact on consumer savings and asset‐building.     

A Comparative‐Advantage Approach to Government Debt Maturity

We study optimal government debt maturity in a model where investors derive monetary services from holding riskless short‐term securities. In a setting where the government is the only issuer of such riskless paper, it trades off the monetary premium associated with short‐term debt against the refinancing risk implied by the need to roll over its debt more often. We extend the model to allow private financial intermediaries to compete with the government in the provision of short‐term money‐like claims. We argue that, if there are negative externalities associated with private money creation, the government should tilt its issuance more toward short maturities, thereby partially crowding out the private sector's use of short‐term debt.     

Tourism from Above and Below: Globalization,Localization and New Orleans's Mardi Gras

Scholars currently debate whether tourism is a force of standardization that eradicates local cultures and traditions or whether tourism is a force of heterogeneity that enhances place distinctiveness. This article uses a case study of the Mardi Gras celebration in New Orleans to explain the connections between global forces and local actions in the development of urban tourism. I argue that the globalization and localization of Mardi Gras are occurring simultaneously with the result being a mix of homogenizing and particularizing influences in New Orleans. I develop this argument by distinguishing between ‘tourism from above’ and ‘tourism from below’, a distinction that helps to explain how tourism can help undermine as well as promote local differences. ‘Tourism from above’ refers to the global level forces of commodification, standardization and rationalization that affect all cities. ‘Tourism from below’ refers to the ways in which local groups and individuals resist the homogenizing effects of globalized tourism and use tourism to anchor Mardi Gras in place and create new carnival traditions. Analysis of global‐local connections in tourism provides an important opportunity for theoretical development and offers a unique perspective for understanding tourism as a process of globalization and localization. Les intellectuels s’interrogent actuellement sur le fait que le tourisme soit ou non une force de normalisation capable d’éliminer cultures et traditions locales, ou une force d’hétérogénéité qui renforce le caractère distinctif des lieux. Utilisant une étude de cas sur la célébration de Mardi gras à la Nouvelle‐Orléans, l’article explique les relations entre forces mondiales et actions locales dans le développement du tourisme urbain: mondialisation et localisation de cette fête se produisent simultanément, se traduisant dans la ville par une combinaison d’influences homogénéisantes et singularisantes. La démonstration établit ensuite une distinction entre ‘tourisme par le haut’ et ‘tourisme par le bas’ qui permet d’éclaircir comment l’activité peut contribuer tant à atténuer qu’à favoriser les différences locales. Le ‘tourisme par le haut’ s’applique aux forces mondiales de banalisation, normalisation et rationalisation qui touchent toutes les grandes villes. Le ‘tourisme par le bas’ portent sur les moyens qu’appliquent groupes et individus locaux dans le but de résister aux effets homogénéisateurs du tourisme mondialisé et de se servir de cette activité pour ancrer Mardi gras dans le lieu et créer de nouvelles traditions carnavalesques. L’analyse des relations entre les plans mondial et local dans le domaine du tourisme offre une possibilité intéressante de théorisation et une perspective unique d’appréhension du tourisme comme processus de mondialisation et localisation.