We analyze a model in which agents exert effort to create innovations within an organization. When payments are infeasible, the decision on the implementation of a proposal is shown to be made by simple monotonic decision rules. Then we look for optimal rules in several contexts. A trade-off...

We analyze in an incomplete contracts model whether a supplier should be integrated if in addition to his investment level he chooses the intensity of specialization towards the buyer's needs. A basic trade-off arises: While non-integration leads to higher investment incentives, potential...

Economies of scope arise from synergies in the production of similar goods. The classical notion of joint production explains instances of such synergies by the fact that some factors of production are pure public inputs. We argue that this explanation applies much more generally than is usually...

This paper examines strategic trade policy with unilateral intervention under asymmetric information about market demand. In an international Cournot-duopoly, the choice of the domestic country's export subsidy signals the domestic country's private information to the foreign firm. It is shown...

Quasimonotone individual demand correspondences are characterized as those which can be rationalized (in a weak sense) by a complete, upper continuous, monotone, and convex preference relation. Moreover, it is shown that an arbitrary set of demand observations can be rationalized by a reflexive,...

We analyze explicit and implicit contracts in a repeated principal-agent model with observable but only partially contractible actions of the agent. It is shown that the set of implementable actions may increase or decrease if additional actions become contractible.

In this paper we introduce markets for information about assets' payoffs in a two-period General Equilibrium Incomplete Markets Model. We consider asymmetric Walrasian equilibria with endogenous information allocations and analyze the interaction between demand for information and equilibrium...

From noisy observations of a finite family of functions an approximation in a lower dimensional space can be constructed using the method of principal components. If certain restrictions are to be satisfied by the approximation, e.g. being densities, this leads to a modified estimation...