We consider multi-stage elimination contests, where agents’ efforts at different stages generate some output for the organizers. Depending on the output function we characterize the optimal prize structure of the tournament and show that it is almost efficient. We have found that in some cases...

According to New Institutional Economics, two or more individuals will found an organization, if it leads to a benefit compared to market allocation. A natural consequence will then be internal rent seeking. We discuss the interrelation between profits, rent seeking and the foundation of...

This paper discusses the optimal firm size in the presence of influence activities, and the level of individual rent-seeking dependent on the economic situation of the firm. Since size has a discouraging effect on the level of individual rent-seeking but also a quantity effect as the number of...

Many successful franchise chains directly own a positive fraction of stores --- a structure referred to as plural form. We propose that this ownership structure is chosen as a commitment not to expropriate franchisees. The theoretical model is based on an empirical analysis of contract and...

In this paper we experimentally investigate whether the so-called in-group/out-group bias leads to a favoring of own team members as candidates in promotion (by voting for them) relative to other teams and their members. In contrast to psychological approaches, mon- etary incentives for voting...

According to New Institutional Economics, two or more individuals will found an organization, if it leads to a benefit compared to market allocation. A natural consequence will then be internal rent seeking. We discuss the interrelation between profits, rent seeking and the foundation of...

Abstract: In this paper we experimentally investigate whether the so-called in-group/out-group bias leads to a favoring of own team members as candidates in promotion (by voting for them) relative to other teams and their members. In contrast to psychological approaches, mon- etary incentives...

This paper discusses the optimal firm size in the presence of influence activities, and the level of individual rent-seeking dependent on the economic situation of the firm. Since size has a discouraging effect on the level of individual rent-seeking but also a quantity effect as the number of...

Many successful franchise chains directly own a positive fraction of stores --- a structure referred to as plural form. We propose that this ownership structure is chosen as a commitment not to expropriate franchisees. The theoretical model is based on an empirical analysis of contract and...

This paper extends the standard principal-agent model with moral hazard to allow for agents having reference- dependent preferences according to Köszegi and Rabin (2006, 2007). The main finding is that loss aversion leads to fairly simple contracts. In particular, when shifting the focus from...