Most contracts that individuals enter into are not written from scratch; rather, they depend upon forms and terms that have been successful in the past. In this paper, we study the structure of form construction contracts published by the American Institute of Architects (AIA). We show that...

In our simple model the supervisor: i) cannot observe the agent's effort; ii) aims at inducing the agent to exert high effort; but iii) can only offer rewards based on performance. Since performance is only stochastically related to effort, evaluation errors may occur. In particular, deserving...

A main prediction of agency theory is the well known risk-incentive trade-off. Incentive contracts should be found in environments with little uncertainty and for agents with low degrees of risk aversion. There is an ongoing debate in the literature about the first trade-off. Due to lack of...

Theoretical analyses of (optimal) performance measures are typically performed within the realm of the linear agency model. This model implies that, for a given compensation scheme, the agent’s optimal effort is unrelated to the amount of noise in the performance measure. In contrast,...

Mirroring the railroad industry of the 1940’s and 1950’s, the trucking industry today appears to be achieving impressive productivity gains. But it is easy to confuse true productivity advances in transportation industries with changes in ton-miles per unit of input that are due simply to...

We use small Italian regions (i.e. provinces) to investigate the causal effect of foreign immigration on innovation during 2003-2008. Using instrumental variables estimation (based on immigrants' enclaves), we find that the overall stock of immigrants did not have any effect on innovation....

This paper contributes to the existing literature on public employment showing that the wage setting policy of the public sector can be an important determinant of private employment and unemployment. I look at the case of geographically homogeneous wages across regions with different private...

We investigate the impact of delaying the first birth on Italian mothers' labor market outcomes around childbirth. The effect of postponing motherhood is identified using biological fertility shocks, namely the occurrence of miscarriages and stillbirths. Focusing on mothers' behavior around...