We test the hypothesis that "genuine" or "convincing" smiling is a costly signal that has evolved to induce cooperation in situations requiring mutual trust. Potential trustees in a trust game made video clips for viewing by potential trusters before the latter decided whether to send them...

This paper quantifies the relationship between market size and innovation in the pharmaceutical industry. We estimate the elasticity of innovation, as measured by the number of new chemical entities appearing on the market for a given disease class, to the potential market size represented by...

Using an original dataset describing the career history of some 16,000 senior executives and members of the non-executive board of US, UK, French and German companies, we investigate gender differences in the use of social networks and their impact on earnings. There is a large gender wage gap:...

This paper examines how networks of professional contacts contribute to the development of the careers of executives of European and US companies. We build a dynamic model of career progression in which career moves both depend upon existing networks and contribute to the development of future...

Two decades after the end of central planning, we investigate the extent to which the advantages bequeathed by planning in terms of high investment in physical infrastructure and human capital compensated for the costs in allocative inefficiency and weak incentives for innovation. We assemble...

This paper approaches the question of the appropriate level of decentralization of power in government as a problem in the allocation of control rights under incomplete contracts. This approach is preferable to that of the literature following the Tiebout model of local public goods, which...

How should a policy-maker prioritize interventions to improve the public infrastructure with which firms operate and how large are the benefits from doing so likely to be? To address these questions we use survey data on the obstacles arising from poor quality public inputs that managers face in...

This paper investigates a hitherto unexplored rationale for firms to enter into joint ventures. We model risky projects with autocorrelated productivity shocks as creating an option value of investing over time so that later investments benefit from the information revealed by the realization of...

Politicians frequently undertake projects whose budgetary costs are disproportionate to the benefits they create for the voters or shareholders those decision-makers represent. When they are not the result of simple random mistakes, such wasteful projects are often attributed to weak mechanisms...

This paper examines the changing incentives for the efficient management of firms in Eastern Europe. It contrasts the internal constitution of the firm (its governance and reward structures) with the various constraints imposed on the firm's activities by external conditions in capital, labour...