This article develops a simple but general criminal decision framework in which individual crime and organized crime are coexisting alternatives to a potential offender. It enables us to endogenize the size of a criminal organization and explore interactive relationships among sizes of criminal organization, the crime rate, and the government's law enforcement strategies. We show that the method adopted to allocate the criminal organization's payoffs and the extra benefit provided by the criminal organization play crucial roles in an individual's decision to commit a crime and the way in which he or she commits that crime. The two factors also jointly determine the market structure for crime and the optimal law enforcement strategy to be adopted by a government. (JEL K4) Economic Inquiry (ISSN 0095-2583)

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This paper builds an endogenous growth model in which a government implements entry regulations and bureaucrats are corrupt, with both governing firms' entry. We show that in the presence of increasing returns to production specialization, high corruption and high growth can coexist. This explains why some developing countries are stuck with high levels of corruption and low levels of growth, while others are not. Moreover, in the face of either stricter anti-corruption enforcement or deregulation by promoting market competition, corruption may exhibit an intensive margin response in the sense that the number of bribe-paying firms decreases, but each individual firm bribes more for a production license.

While the traditional economic wisdom believes that an individual will become better off by being given a larger opportunity set to choose from, in this paper we question this belief and build a formal theoretical model that introduces decision costs into the rational decision process. We show, under some reasonable conditions, that a larger feasible set may actually lower an individual’s level of satisfaction. This provides a solid economic underpinning for the Simon prediction. Copyright Springer 2005bounded rationality, considered subset, decision cost, D11, D83,

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