We consider public-private partnerships, in which a public official selects a project that is then developed and operated by a private contractor. We derive optimal public accounting rules when the official's choice among projects is biased by ideology or social ties or because of pandering to...

The authors introduce a class of alternating-move, infinite-horizon models of duopoly. The timing captures the presence of short-run commitment s. They apply this framework to a natural monopoly in which costs are so large that at most one firm can make a profit. The firms install short-run...

The authors provide game theoretic foundations for the classic kinke d demand curve and Edgeworth cycle. In their alternating-move model, there are multiple Markov perfect equilibria of both the kinked deman d curve and Edgeworth cycle variety. In any Markov perfect equilibria , profit is...

A principal has private information that directly affects her agent's payoff (i.e., "common values" obtains). The authors analyze their relationship as a three-stage game: (1) the principal proposes a contract; (2) the agent accepts or rejects; and (3) the contract is executed. They show that...

The authors analyze the principal-agent relationship when the principal has private information as a three-stage game: contract proposal, acceptance/refusal, and contract execution. They assume that the information does not directly affect the agent's payoff (private values). Equilibrium exists...

We build a simple model to capture the major virtues and drawbacks of making public officials accountable (i. e., subjecting them to reelection): On the one hand, accountability allows the public to screen and discipline their officials; on the other, it may induce those officials to pander to...

The authors scrutinize the conceptual framework commonly used in the incomplete contract literature. This literature usually assumes that contractual incompleteness is due to the transaction costs of describing--or of even foreseeing--the possible states of nature in advance. They argue,...