Conventional hedonic analysis measures willingness to pay for attributes on the basis of marginal fixed costs. We argue that in many cases variable costs are also affected by these attributes and that this should be taken into account. We develop a simple model to show that the marginal...

This paper studies how morale in teams can break down. It interprets high morale as team members working together productively, either because of a sense of fairness or because of implicit incentives from repeated interactions. Team members learn that lay-offs will occur at a fixed future date,...

In this paper we want to analyze the internal divisional structure within an organi-zation in the framework of incomplete contract theory. We use the framework of Aghionand Tirole (1997) and define the managerial control structure as sequence of search.A key feature of this paper which...

This paper examines the small world hypothesis. The first part of the paper presents empirical evidence on the evolution of a particular world: the world of journal publishing economists during the period 1970-2000. We find that in the 1970's the world of economics was a collection of islands....

We model a firm in an institutional market setting, consisting of a production technology and its governance. The governance consists of a hierarchical firm structure, a cost efficiency parameter,and an internal pay system. The depth of the firm is determined by profit maximization under the...

Human capital obtained through education has been shown to be one of the strongest drivers of entrepreneurship performance. The entrepreneur's human capital is, though, only one of the input factors into the production process of her venture. The value of other input factors, such as (knowledge)...

This paper studies mergers in markets where firms invest in a portfolio of research projects of different profitability and social value. The portfolio nature of the investment problem brings about novel insights on the external effects of firms' investments. The investment of a firm in one...

This article analyzes the role of suggested prices in the Dutch retail market for gasoline. Suggested prices are announced by large oil companies with the suggestion that retailers follow them. There are at least two competing rationales for the existence of suggested prices: they may either...

Where markets are insufficiently competitive, governments can intervene by auctioninglicenses to operate or by forcing divestitures. The Dutch government has doneexactly that, organizing auctions to redistribute tenancy rights for highway gasolinestations and forcing the divestiture of outlets...

This paper presents a trade model with capital and labor as factors of production. The main contribution of this paper is that it considers a new type of firm heterogeneity, which is empirically relevant: firms in this paper differ with respect to their factor shares in production. Therefore,...