Collaboration among people is often subject to shirking; the net gain from collaboration depends on the contract governing it. The author argues that the entrepreneur assumes the role of residual claimant because his actions are more costly to monitor than those of the factors with which he...

In this paper the author suggests that besides Frank Knight's well recognized "uncertainty" explanation of the firm, he had another one. "Moral hazard" is the central feature in the second, largely overlooked theory. The author argues, and attempts to document, that this theory is not a chance...

Contract stipulations tend to be subject to commodity standards. Standards make it clearer what transactors have agreed upon. They also bring stipulations from different contracts under a common denominator. The lower the cost of measuring an attribute and the wider the range of its application,...

This paper argues that, in the middle ages, voting institutions emerged as mechanisms that allowed rulers to cooperate with subjects on mutually profitable projects. In spite of their utility, many of these voting institutions eventually declined. The authors test the model on the English...

"This article proposes a theory of group formation based on the motive to seek informed opinion. Because an individual evaluates whether others are informed or not using his own priors, he identifies people with similar beliefs to be more informed than those with different beliefs. The result is...

This paper takes Gary Becker's efficient marriage market hypothesis at face value and directly confronts it with data from Hong Kong. The theory of optimal assignment is used to develop an empirical model of spouse selection, which resembles a Tobit model. This model can address positive or...

We examine how no-fault divorce law affects the age at first marriage, when everyone has a different value of marriage. The heterogeneity of individual values implies an unambiguous negative effect on the variance of marriage age. We test this hypothesis with marriage records from 1970 to 1995....