Specific supply-chain investments are vital in achieving faster lead-time performance and more competitive costs. In practice, such as in the highly leveraged telecom sector, the coordinating original equipment manufacturers (OEM) often delegate the upstream coordination of suppliers to contract...

Revenue sharing can be used to discourage low tax regions from competing for capital and firms with high tax regions. However, with heterogeneous regions, revenue sharing involves net transfers across regions and creates a 'moral-hazard' problem that is, regions may want to invest less in market...

A partly heuristic attempt at exploring long-run policies aimed at a second-best compromise between ex ante risk-sharing efficiency and ex post productive efficiency. Wage subsidies for low-skilled workers financed by taxes on high wages are advocated, together with improved risk sharing between...

This note presents a modest extension of the very useful "theorem of the deductible" (Arrow, American Economic Review, 1963). The extension concerns ex post moral hazard in medical insurance. Under full insurance above a deductible, the marginal cost of treatment to the insured is zero,...

We consider a start-up firm which applies for a bank loan to implement a project based on complementarity activities. The firm has the possibility to improve the complementarity effect by coordinating the activities. Coordination is costly and can be made either by using internal human resources...

Economic research has inquired the role of asymmetric information between central and local governments in shaping the structure of optimal regional grants. In the mainstream literature, the theoretical setting has been characterized by some basic informational asymmetry between central...