The Coasean theory of the firm (Coase, 1937) has flourished with the theory of incomplete contracts. Transaction costs in the form of enforcement costs have been deemed to be the main determinants of the decision to ‘make’ versus ‘buy’. Surprisingly, this stream of literature has almost...

Many real world transactions occur in a common agency environment in which an agent interacts with several principals having competing interests. The hold-up literature, however, has so far neglected to investigate common agency transactions. In this paper, we consider the hold-up problem that...

New-Keynesian macroeconomic models typically conclude that longrun unemployment gravitates around the NAIRU, regardless of the nominal inflation rate. Contrastingly, the model of Akerlof, Dickens and Perry (2000) (ADP) predicts that excessively low inflation may result in a situation where...

The claim of this paper is to investigate the relationship between social protection and the investment in human capital. The idea is that investment in human capital is risky and therefore, as a prerequisite, needs some kind of protection as insurance. Investments in specific human capital, in...

Marx develops two alternative theories of the employment contract: one treats it as an agreement of commodity exchange, and one as a relational arrangement. In the former theory Marx introduces the notion of 'labour power' as a physical stock of labour capacity. Then he argues that the worker,...

This paper analyzes the relationship between employee participation in work teams, profit sharing and consultation between employees and management, and wages. It uses matched employeeestablishment data from the British economy. It takes explicit account of selectivity that arises from...

The 2007 Italian Labour Force Survey contains employee-level data that allow us to analyse the determinants of work safety. Among the most significant determinants of accidents and illnesses occurring at work we find bad working conditions, not being in the first job, dissatisfaction with the...

Contrary to previous literature, we show that the assignment of authority decision matters in optimal contract design with bilateral specific self-investments. This is the case when we enlarge the set of the states of nature, to explicitly consider the event that a party's market option turns...