Which shape is market competition likely to exhibit? This question is addressed in the present paper, where firms can choose whether to act as quantity or price setters, whether to move early or delay as long as possible at the market stage and finally whether to be entrepreneurial or...

I study the implications of agency frictions for the pricing policy of institutional market makers. In a setting where a market maker cannot observe the actions of an employed trader, I derive the optimal compensation structure and pricing policy. The theory demonstrates that incentive...

This study investigates the structure of optimal incentives in a stochastic environment and provides evidence for the use of self-enforcing relational contracts. We show theoretically that under relational contracting, firms can credibly promise chief executive officers (CEOs) larger bonuses in...

We conduct a laboratory experiment with agents working on and principals benefiting from a real effort task in which the agents’ effort/performance can only be evaluated subjectively. Principals give subjective performance feedback to agents and agents have an opportunity to sanction...

We show that individuals’ desire to protect their self-esteem against ego-threatening feedback can mitigate moral hazard in environments with purely subjective performance evaluations. In line with evidence from social psychology we assume that agents’ react aggressively to evaluations by...

This paper reports experimental evidence on a stylized labor market. The experiment is designed as a sequence of three phases. In the first two phases, P1 and P2; agents face simple games, which we use to estimate subjects' social and reciprocity concerns, together with their beliefs. In the last...

This paper explores the empirical association between internet use, e-government and corruption in a large panel of countries covering the 1998-2003 period. We show that higher numbers of internet users and higher levels of e-government are associated with significantly lower levels of...

This paper adds a quasi-network to a search model of the labor market. Fitting the model to an average unemployment rate and to other moments in the data implies the presence of the network is not noticeable in the basic properties of the unemployment and job finding rates. However, the network...

This paper estimates the effect of trust on internet use by studying the general population as well as second generation immigrants in 29 European countries with ancestry in 87 nations. There is a significant positive effect of trust on internet use. The positive trust effect is not universal to...

This paper estimates the influence of trust on self-assessed health. Second generation immigrants in a broad set of European countries with ancestry from across the world are studied. There is a significant positive effect of trust on selfassessed health. Health has both intrinsic and...