We study how deregulation of corporate law affects the decision of entrepreneurs of where to incorporate.  Recent rulings by the European Court of Justice (ECJ) have enabled entrepreneurs to select their country of incorporation independently of their real seat.  We analyze foreign...

This paper examines the efficiency of stock based compensation by valuing stock and options from the executive`s point of view. Companies give compensation in the form of stock in order to align incentives by providing a link between executive wealth and the stock price performance of the...

Most developing countries face important challenges regarding both the quality and quantity of health care they provide and there is a growing consensus that health workers play an important role in this.  Although contemporary analysis of development emphasizes the central role of...

Tenured public officials such as judges are often thought to be indifferent to the concerns of the elctorate and, as a result, potentially lacking in discipline but unlikely to pander to public opinion.  We investigate this proposition empirically using data on promotion decisions taken by...

This paper investigates the traits of the self-employed entrepreneurs in urban China, an economy rife with informational and institutional imperfections, under-developed financial markets, but a growing and important non-state sector. The self-employed make on average 20% more than...

Teams are becoming increasingly important in work settings.  We develop a framework to study the strategic implications of a meritocratic notion of desert under which team members care about receiving what they feel they deserve.  Team members find it painful to receive less than their...

In this paper we use agency theory to study the active role of the chief executive in the formulation of corporate strategy. Unlike traditional applications of agency theory, we allow the agent (CEO) to play a role in defining the parameters of the agency problem. We argue that CEOs will have an...

We use an online real-effort experiment to investigate how bonus-based pay and worker productivity interact with workplace cheating.  Firms often use bonus-based compensation plans, such as group bonuses and firm-wide profit sharing, that induce considerable uncertainty in how much workers are...

This paper considers why organizations use promotions, rather than just monetary bonuses, to motivate employees even though this may conflict with efficient assignment of employees to jobs. When performance is unverifiable, use of promotion reduces the incentive for managers to be affected by...

Risk-neutral individuals take more risky decisions when they have limited liability.  Risk-neutral managers may not when acting as agents under contract and taking costly actions to acquire informatin before taking decisions.  Limited liability makes it optimal to increase the reward for...