Cobb Douglas production function parameters are not identified from cross-section variation when inputs are perfectly flexible and chosen optimally, and input prices are common to all firms. We consider the role of adjustment costs for inputs in identifying these parameters in this context. The...

In this paper we study the delegation of a production process in a three-tier hierarchy. The principal contracts directly only with the supplier that produces the first input leaving him in charge of the contract for the production of the second input. We allow the principal to costlessly...

This paper proposes a "Flexible Disequilibrium Model" (FDM) which allows for a flexible specification of technology and of firm-level heterogeneity in technical and allocative efficiency levels. FDM is implemented on a G-5 banking dataset covering the period 1989-1996. Significant scale...

In this paper we analyze a simple two-sided adverse selection model with one principal and one agent. They are both risk neutral and have private information about their type. We also assume that the private information of the principal is correlated with the one of the agent. The main result of...

Empirical evidence suggests that a Prime Minister can benefit from firing ministers who are involved in political scandals. We explore a model in which a minister`s exposure to scandals is positvely related to his policy activism, so that a Prime Minister may wish to protect him from resignation...

We evaluate the impact of firm-specific export subsidies on exports in Colombia.  Using a two-stage selection correction procedure, we obtain firm-specific predicted subsidy amounts that can be explained by the characteristics that determine the firms' eligibility for government support and its...

This paper investigates the interaction between corruption and infrastructure policy reforms.  I construct a simple model to illustrate how both an incerase in regulatory autonomy and privatisation may influence the effect of corruption.  This interaction is then analysed empirically using a...

Working with a sample of individuals from 43 countries, including some of the most and least corrupt in the world, we run an experiment in which: `private citizens` have to decide whether and how much to offer `public servants` in exchange for corrupt services; `public servants` have to decide...

Using a simple one-shot bribery game, we find evidence of a negative externality effect and a framing effect.  When the losses suffered by third parties due to a bribe being offered and accepted are high and the game is presented as a petty corruption scenario instead of in abstract terms...

This paper examines the relationship between norm enforcement and in-group favouritism behaviour.  Using a new two-stage allocation experiment with punishments, we investigate whether in-group favouritism is considered as a social norm in itself or as a violation of a different norm, such as...