Final goods producers, who may be intrinsically honest (a behavioral type) or opportunistic (strategic), play a repeated game of imperfect information with suppliers of an input of variable (and non-verifiable) quality. Returns to cheating are increasing in the proportion of intrinsically honest...

We study the role of information exchange, leadership and coordination in team or partnership structures. For this purpose, we view individuals jointly engaging in productive processes -- a 'team' -- as endowed with individual and privately held information on the joint production process. Once...

Do firms use autonomy to motivate workers, or do they give autonomous jobs to workers who are already especially motivated? A standard result in economics is that firms offer autonomous jobs to promote worker motivation. But surprisingly, little attention has been given to the details of this...

Firm insiders – a manager and a board – face moral hazard in relation to their outside shareholders in a repeated game with asymmetric information and stochastic market outcomes. The manager determines whether or not outsiders are cheated; the board, whose objectives differ from those of...

Much of the macro literature on the recent Asian crisis argues that a major cause was over borrowing and over investment encouraged by poor supervision and the resulting moral hazard problem. Surprisingly however there is little firm-level evidence to corroborate this. The present paper examines...