Eric Rasmusen's Recent Papers (May 7, 2014)

Abstracts and downloads of all my published and unpublished papers are at and . Business Economics and Public Policy, Kelley School of Business, Indiana University. (812) 855-9219, [email protected]

"Maximization Is Fine--- But Based on What Assumptions?" Forthcoming, Economics Journal Watch. Something like utility maximization has long been present in Christian theology. Economics is “flat” in its style and, unlike religion, excludes by custom certain scholarly tools which would complement the flat approach. I will argue, however, that the essential difference is that some religions, in particular Christianity, take their start from belief in factual assumptions that economics ignores.

Project: "Pamphleteering Amici: The Hyman-Fallon Effect in Hobby-Lobby," with J. Mark Ramseyer. On corporations and non-profit goals, with attention to the Obamacare litigation on the contraception mandate.

The Economics of Regulation.< I have notes for an undergraduate textbook on regulation. I start with 4 chapters of theory (supply-and-demand, market failure, government failure, discounting and life valuation) and have just 2 chapters of antitrust, with 6 more chapters on other topics. My aim, if I do end up trying to publish this, is to write a relatively short book (350 pages) with lots of photos and stories, skipping many topics and being interesting enough for someone to read for recreation.

"Exclusive Dealing: Before, Bork, and Beyond," with J. Mark Ramseyer. Forthcoming, Journal of Law and Economics. Antitrust scholars have come to accept the basic ideas about exclusive dealing that Bork articulated in The Antitrust Paradox. Indeed, they have even extended his list of reasons why exclusive dealing can promote economic efficiency. Yet they have also taken up his challenge to explain how exclusive dealing could possibly cause harm, and have modelled a variety of special cases where it does. Some (albeit not all) of these are sufficiently plausible to be useful to prosecutors and judges.

"Lowering the Bar to Raise Up the Bar: Licensing Difficulty and Attorney Quality in Japan," forthcoming, Journal of Japanese Studies, with J. Mark Ramseyer. A relaxation in licensing standards can increase the quality of those who enter the industry. The effect turns on the opportunity cost of preparing for licensing. Making the test easier can increase the quality of those passing by increasing the number willing to take the test. We explore the theoretical circumstances under which this can occur and the actual effect in Japan from 1992 to 2011.

Project: ``How Immigration Can Hurt a Country. '' Can immigration (or capital inflow) hurt the welfare of a country? Yes, if there are decreasing returns to the factor, as this little paper will explain.

Project: "What Does It Mean To Be a Liberal? An Objective Approach,'' with J. Mark Ramseyer. How does one define what it means to be a liberal? I suggest an objective measure based on what the average person thinks it means to be liberal, regressing a person's self-reported liberalism on his personal characteristics and his answers to specific political questions in the General Social Survey. This method allows one to test whether people think of liberalism as a characteristic of social identity (``I'm an unmarried black female, so I must be liberal'') or of political belief (``I'm pro-abortion, so I must be a liberal'').

Project: "Agape, the Golden Rule, the Rule of Law, and Wealth Maximization: All the Same Idea?" Agape is better translated as "esteem" than "love". Applied to public policy, it implies equality under the law, not pity or social justice. Mercy is a Christian private virtue, but not a public one.

"Internalities and Paternalism: Applying the Compensation Criterion to Multiple Selves across Time," Social Choice and Welfare, 38(4): 601-615 (2012). Gruber & Koszegi (2001) show how a vice tax can increase a person's welfare in a model of multiple selves with hyperbolic preferences across time. An interself analogy of the compensation criterion can justify a vice ban whether preferences are hyperbolic or exponential, but subject to the caveat that the person has a binding constraint on borrowing.

"Coarse Grades,'' with Rick Harbaugh. Certifiers of quality often report only coarse grades to the public despite having measured quality more finely, e.g., "A" instead of "98". Why? We show that using coarse grades can actually result in more information reaching the public, because it encourages low-quality individuals or firms to become certified. In our model the certifier aims to minimize public uncertainty over quality subject to the feasibility constraint of voluntary certification at a fixed cost. Moving from the best exact grading scheme to the best coarse one (a) induces more participation and (b) reduces public uncertainty.

"Project: Hilbert's Side-Angle-Side Axiom in Proposition I-4 of Euclid's Elements". I search for a better axiom with which to fix up Euclid's flawed proposition that two triangles are the same if two of their sides and the angle created by them are the same.

"Project: Machiavelli and Han Fei" (with Dan Zhao). We plan to compare and contrast these two economistical thinkers.

"Quasi-Concavity versus Concavity,'' with Christopher Connell. We show that if and only if a real-valued function f is strictly quasi-concave except possibly for a flat interval at its maximum, and furthermore belongs to an explicitly determined regularity class, does there exist a strictly monotonically increasing function g such that g of f is concave. We prove this sharp characterization of quasi-concavity for functions whose domain is any Euclidean space or even any arbitrary geodesic metric space.

"Can the Treasury Exempt Companies It Owns from Taxes? The $45 Billion General Motors Loss Carryforward Rule" (with J. Mark Ramseyer), The Cato Papers on Public Policy, Vol. I, article 1 (2011) edited by Jeffrey Miron, . After the government joined private parties in purchasing most of General Motors, the Secretary of the Treasury issued “the EESA Notices” which said that the usual tax rules would not apply and the purchasers could deduct $45 billion from their future corporate income, a tax asset worth an estimated $16 billion. This paper argues that there is no legal or economic justification for the EESA Notices .

"How Useful Is a Product Umbrella for Reputation?'' A firm with a reputation for high quality in one product may usefully extend that reputation to other products. I look at how that works in a moral hazard model of product quality.

"Are Americans More Litigious? Some Quantitative Evidence, (with J. Mark Ramseyer) in An American Illness , edited by Frank Buckley, Yale University Press, 2013. The data themselves indicate that American law’s notoriety does not result from how we handle routine disputes. Instead, it results from the peculiar and dysfunctional way American courts handle particular legal ideas such as class actions. pdf

"Preliminary Injunctions in the Obamacare Religious-Objection Lawsuits I and II: Amicus Briefs for Hobby Lobby v. Sebelius (10th Circuit) and Mersino v. Sebelius (6th Circuit)" How should we test for whether to grant a preliminary injunction to prevent enforcement of Obamacare until the merits of religious freedom suits are decided? I argue that the government’s loss is limited by the dollar expenditure to pay for the disputed contraceptives till the merits are decided, that non-government losses are large because of qualified immunity, that the Sixth Circuit missed the controlling Supreme Court opinion on preliminary injunctions and a sliding-scale rule for balancing the equities should be used. pdf ( ) and pdf ( ).

"The Meaning of "Value" for Gift and Estate Tax Donee Limitation in Tax Code 26 U.S.C. § 6324(B): An Amicus Brief for Marshall v. Commissioner" Does the limitation on donee liability to “the value” of the gift imposed by 26 U.S.C. § 6324(b) mean to “the original amount of the gift” or to “the value of the gift at the time of eventual tax payment”? I argue it should refer to the present discounted value. In pdf (

"The Concealment Argument: Why No Proof for God’s Existence Will Be Found," Logic and Biblical evidence suggest that God wishes that some but not all humans become convinced of His existence and desires. If so, this suggests that attempts to either prove or disprove such things as God's existence, past miracles, or present supernatural intervention are doomed to failure, because God could and would take care to evade any such efforts. .