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...

We analyze the complementarity between legal incentives (the threat of being held liable for damages) and normative incentives (the fear of social disapproval or stigma) in situations where instances of misbehavior are not perfectly observable. There may be multiple equilibria within a given...

We analyse pricing, e¤ort and tipping decisions in the online service GoogleAnswers. While users set a price for the answer to their question ex ante, theycan additionally give a tip to the researcher ex post.In line with the related experimental literature we …nd evidence that tippingis...

We consider guilt averse agents and principals and study the effects ofguilt on optimal behavior of the principal and the agent in a moral hazardmodel.The principal’s contract proposal contains a target effort in addition tothe monetary incentive scheme. By accepting the agreement, the...

Amidst a sharp increase in household debt levels, many countries have substantially reformedtheir consumer bankruptcy regulations. I first classify the mechanisms triggered by current U.S.and European bankruptcy regulations and then evaluate these mechanisms within a hidden actionmodel. I...

We analyze the efficiency properties of the negligence rule with liability insurance, when the tort-feasor's behavior is imperfectly observable both by the insurer and the court. Efficiency is shown to depend on the extent to which the evidence is informative, on the evidentiary standard for...