This paper examines optimal decision making under three different organizational forms: committees, hierarchies, an d polyarchies. Focus is on the trade-off between errors of rejecting good projects versus errors of accepting bad projects, and on the tra de-off between gains from more extensive...

Standard implicit contract theory can explain wage rigidity but not unemployment and pays insufficient attention to the general equilibrium aspects and constraints limiting the set of feasible contracts. Implicit contracts must specify an enforcement mechanism, can only be conditional on...