Employment contracts give a principal the authority to decide flexibly which task his agent should execute. However, there is a tradeoff, first pointed out by Simon (1951), between flexibility and employer moral hazard. An employment contract allows the principal to adjust the task quickly to...

Employment contracts give a principal the authority to decide flexibly which task his agent should execute. However, there is a tradeoff, first pointed out by Simon (1951), between flexibility and employer moral hazard. An employment contract allows the principal to adjust the task quickly to...

Economic theory needs a stronger defence against unwise application of mathematics. Mathematicians are trained for abstract thought and not for empirical science. Their contribution can wreak havoc, for example in education with real life pupils and students, in finance by neglecting real world...

Arrow’s Impossibility Theorem in social choice finds different interpretations. Bordes-Tideman (1991) and Tideman (2006) suggest that collective rationality would be an illusion and that practical voting procedures do not tend to require completeness or transitivity. Colignatus (1990 and 2011)...

Various scientists under the label of “Scientists for a democratic Europe” (SDE) sent a joint “Letter to the governments of the EU member states” (2007) advising the use of the Penrose Square Root Weights (PSRW) for the EU Council of Ministers. When we compare the SDE letter with...

There will be many researchers who discover voting theory afresh and who will want to understand it and its interesting paradoxes. Arrow's theorem (1951, 1963) is the most celebrated result in social choice theory. It has been criticized a lot but Howard DeLong (1991), "A refutation of Arrow’s...

Democratic nations are advised to have parliaments select the chief executive by the Borda Fixed Point method. The current practice of having direct popular elections using systems that have originated in history is inoptimal and actually quite undemocratic since winners are selected who don’t...

We analyze data on sustainability of democratic regimes in resource rich countries and suggest a two-period model to explain why resource abundance may lead to instability of democracy in some countries, but does not create any difficulties for democratic system in other ones. Our central idea...

In recent decades, many firms offered more discretion to their employees, often increasing the productivity of effort but also leaving more opportunities for shirking. These “high-performance work systems” are difficult to understand in terms of standard moral hazard models. We show...