We study experimentally how the ability to communicate affects the frequency and effectiveness of flexible and inflexible contracts in a bilateral trade context where sellers can adjust trade quality after observing a post-contractual cost shock and a discretionary buyer transfer. In the absence...

We consider a market where firms hire workers to run their projects and such projects differ in profitability. At any period, each firm needs two workers to suc- cessfully run its project: a junior agent, with no specific skills, and a senior worker, whose effort is not verifiable. Senior...

Many organizations suffer poor performance because individuals within the organization fail to coordinate on efficient patterns of behavior. Using controlled laboratory experiments, we study how financial incentives can be used to find a way out of such performance traps. Our experiments are set...

We study manager-employee interactions in experiments set in a corporate environment where payoffs depend on employees coordinating at high effort levels; the underlying game being played repeatedly by employees is a weak-link game. In the absence of managerial intervention subjects invariably...

Many organizations suffer poor performance because its members fail to coordinate on efficient patterns of behavior. In previous research, we have shown that financial incentives can be used to find a way out of such performance traps. Here we examine the sensitivity of this result to the...

We have two main objectives in this work. Firstly, to link product market structure with the inventory policy followed by firms. Secondly, to study the effect of different financila contracts in firm's policy, in particular in its inventory policy. This will allow to define for a given economic...

This paper aims at assessing the optimal behavior of a firm facing stochastic costs of production. In an imperfectly competitive setting, we evaluate to what extent a firm may decide to locate part of its production in other markets different from which it is actually settled. This decision is...

This paper analyses the costs and benefits of using a Main Bank (MB) as a financial provider, which is so common in countries such as Japan. Several banks lend resources to a particular firm but only one monitors and remains responsible to other participants. These inside banks act as fund...

The objective of this paper is to identify the role of memory in repeated contracts with moral hazard in financial intermediation. We use the database we have built containing the contracts signed by the European Bank for Reconstruction and Development EBRD between 1991 and 2003. Our framework...

We study the effects of a change in some exogenous variable (the fixed cost or a parameter in the payoff functions) on the strategies played in a Symmetric Cournot Equilibrium with Free Entry (SCEFE). We also show that any observation on prices, profits and number of firms is compatible with the...