When a multi-plant firm must close one unit due to declining demand it can choose between two alternatives. On the one hand, the firm can announce a certain span of time in which the plants are evaluated according to relative performance with the least performing plant being shut down in the end...

This paper uses a two-country model with integrated markets for high-skilled labor to analyze the opportunities and incentives for national governments to provide higher education. Countries can differ in productivity, and education is financed through a wage tax, so that brain drain affects the...

A model with search and matching frictions and heterogeneous workers was established to evaluate a reform of the public sector wage policy in steady-state. The model was calibrated to the UK economy based on Labour Force Survey data. A review of the pay received by all public sector workers to...

The quality of public management is a recurrent concern in many countries. Calls to attract the economyﾒs best and brightest managers to the public sector abound. This paper studies self-selection into managerial positions in the public and private sector, using a model of a perfectly...

We study the interaction between competitive markets that produce large but unequally distributed welfare gains and elections through which the poor majority can redistribute income away from the rich minority. In our simple laboratory democracy, subjects first earn their income by trading in a...

We introduce and study the problem of manipulation of choice behavior. In a class of two-stage models of decision making, with the agent's choices determined by three "psychological variables," we imagine that a subset of these variables can be selected by a "manipulator." To what extent does...

This paper studies the assignment of decision makers to two committees that make decisions by a simple majority rule. There is an even number of decision makers at each of various skill levels and each committee has an odd number of members. Surprisingly, even with the symmetric assumptions in...

The ability of groups to implement efficiency-enhancing institutions is emerging as a central theme of research in economics. This paper explores voting on a scheme of intergroup competition which facilitates cooperation in a social dilemma situation. Experimental results show that the...

This paper analyzes the political sustainability of the welfare state in an environment where immigration is the main demographic force and where governments are able to influence the size and skill composition of immigration flows. Specifically, I present a dynamic political-economy model where...

This paper investigates the ability of employment protection to generate its own political support. A version of the Mortensen-Pissarides model is used for this purpose. Under the standard assumption of Nash bargaining, workers value employment protection because it strengthens their hand in...