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Abstract-This paper demonstrates that mall store contracts are written to internalize externalities through both an efficient allocation and pricing of space, and an efficient allocation of incentives across stores. Certain stores generate externalities by drawing customers to other stores, whereas many stores primarily benefit from external mall traffic. Therefore, to varying degrees, the success of each store depends upon the presence and effort of other stores, and the effort of the developer to attract customers to the mall. Using a unique data set of mall tenant contracts, we show that rental contracts are written to (i) efficiently price the net externality of each store and (ii) align the incentives to induce optimal effort by the developer and each mall store according to the externality of each store's effort.

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JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.. Oxford University Press is collaborating with JSTOR to digitize, preserve and extend access to The Quarterly This paper reports on interesting changes in markdown pricing practices over time and differences in the pricing within a product line. The price discrimination and the uncertainty hypotheses appear to better explain the data than the peak load hypothesis. Fashion has become more important over time and appears to explain the greater seasonal variation in retail apparel prices in recent years. Differences in uncertainty also explains differences in the pricing of different types of men's dress shirts.

Special interest can explain why environmental policy limits economic activity in areas where air quality is above minumum standards. Locational competition among region helped create a policy that raised factor mobility cost from slower to faster growing regions. Analysis of votes shows greater support for this policy was received from northern urban constituencies and the greatest opposition came from the South and the West. Pollution abatement costs per unit of output are higher in areas with higher not lower air quality.