This article analyses promotion tournaments where candidates engage in multiple tasks. We consider a promotion rule where the winner of the promotion tournament is randomly selected from the best performers at each task. The promotion tournament can achieve an efficient outcome for any...

The Internet plays a growing role in the economy. This paper extrapolates this trend and analyses a world where most transactions take place in "cyberspace". We ask the following question: how does the design of the search engine affect the incentives to innovate and the economy’s long run...

We study liquidity effects and cost channels within a model of nominal rigidities and imperfect competition that gives explicit role for money-credit markets and investment decisions. We find that cost channels matter for monetary transmission, amplifying the impact of supply shocks and...

We run a computerised experiment of network formation where all connections are beneficial and only direct links are costly. Players simultaneously submit link proposals; a connection is made only when both players involved agree. We use both simulated and experimentally generated data to test...

Financial intermediation and bank spreads are important elements in the analysis of business cycle transmission and monetary policy. We present a simple framework that introduces lending relationships, a relevant feature of financial intermediation that has been so far neglected in the monetary...

This paper provides an explanation for the observed positive relationship between youth unemployment and the cost of firing workers. When the cost of firing workers is high, firms only fire when the present discounted value of future losses is high, in which case they gain little by postponing...