The relationship between government and parents is modelled as a principal-agent problem, with the former in the role of principal and the latter in the role of agents. We make three major points. The first is that, if the well-being of the child depends not only on luck, but also on parental...

The effects and optimal choice of policy instruments affecting the family (child benefits, taxes on child-specific commodities, etc.) are examined within the context of a household economics model with fertility choice. The simultaneous consideration of child benefits and commodity taxes in the...

We examine the effects of differences in social capital on first and second best transfers to families with children, in an asymmetric information context where the number of births, and the future earning capacity of each child that is born, are random variables. The probability that a couple...

Student loans, even income-contingent ones, are not optimal. Potential university students with the appropriate characteristics should be offered a scholarship, dependent on both need and merit. The award of the scholarship should be conditional on the choice of university degree, but students...

Higher education is not just a signal of innate ability. At least a certain level of educational achievement (degree level, degree mark) is strictly required to perform a graduate job. School leavers fall into two categories, the rich and the poor. Ability is distributed in the same way in both...

The hypothesis of non-satiation of rational choice theory is very seldom posed under scrutiny, maybe because it is taken as an anthropologic reality. Looking closer to that, we discover that it is taken for granted only in economic theory, and that it has become a reality as a result of a...

A small committee has to approve/reject a project with uncertain return. Members have different preferences: some are value-maximizers, others are biased towards approval. We focus on the efficient use of scarce information when communication is not guaranteed, and we provide insights on the...

We analyze the optimal ownership, delegation and compensation structures when a manager is hired to run a firm and to gather information on investment projects. The initial owner has two tasks: monitoring the manager and supervising project choice. Optimality would require a large ownership...

The paper analyzes the optimal structure of the board of directors in a firm with a large shareholder sitting on the board. In a one-tier structure the sole board performs all tasks, while in a two-tier structure the management board is in charge of project selection and the supervisory board is...

We analyze optimal compensation schedules for the directors of two plants belonging to the same owner and producing the same good but serving geographically differentiated markets. Since the outcome of each director depends on his own effort and on a random variable representing market...