Lexical rules are used in constraint-based grammar formalisms such as Head-Driven Phrase Structure Grammar (HPSG) (Pollard and Sag 1994) to express generalizations among lexical entries. This paper discusses a number of lexical rules from recent HPSG analyses of German (Hinrichs and Nakazawa 1994) and shows that the grammar in some cases vastly overgenerates and in other cases introduces massive spurious structural ambiguity, if lexical rules apply under unification. Such problems of overgeneration or spurious ambiguity do not arise, if a lexical rule applies to a given lexical entry iff the lexical entry is subsumed by the left-hand side of the lexical rule. Finally, the paper discusses computational consequences of applying lexical rules under subsumption.
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