When managers have objectives beyond maximizing monetary profits, inefficiencies may arise. An increase in competition may then force managers to improve the productivity of the firm in order to ensure survival. While this hypothesis has received ample theoretical attention, empirical evidence...

School systems regularly use student assessments for accountability purposes. But, as highlighted by our conceptual model, different configurations of assessment usage generate performance-conducive incentives of different strengths for different stakeholders in different school environments. We...

We construct a novel data set to show that, between 2003-2020, up to one-fifth of America's largest firms had a non-financial blockholder or insider as their largest shareholder. Blockholders and insiders tend to be less diversified than institutional investors. Measures of "universal" and...

Digital platforms, empowered by artificial intelligence algorithms, facilitate efficient interactions between consumers and merchants that allow the collection of profiling information which drives innovation and welfare. Private incentives, however, lead to information asymmetries resulting in...

Recent field evidence suggests a positive link between overconfidence and innovative activities. In this paper we argue that the connection between overconfidence and innovation is more complex than the previous literature suggests. In particular, we show theoretically and experimentally that...

Authority and power permeate political, social, and economic life, but empirical knowledge about the motivational origins and consequences of authority is limited. We study the motivation and incentive effects of authority experimentally in an authority-delegation game. Individuals often retain...

We study how a preferential trade agreement (PTA) affects international sourcing decisions, aggregate productivity and welfare under incomplete contracting and endogenous matching. Contract incompleteness implies underinvestment. That inefficiency is mitigated by a PTA, because the agreement...

We examine how the legal protection of outside shareholders and the appropriative costs that they induce influence the incentives for private firms to go public. A higher degree of protection of shareholders can increase the appropriative costs associated with the conflict between managers and...

We analyze the long-term effects of firm break-up and ownership change on corporate performance. Our analysis is based on a unique data set for a large number of Czech firms spanning the period 1996-2005. We employ a propensity score matching procedure to deal with endogeneity problems. Our...

Many tasks can only be completed if several people contribute. Likewise, many institutions, e.g. voting rules, require the support of several people to implement specific decisions. In such situations, individual costs from supporting may decrease in the number of supporters. This holds true for...