We demonstrate that a multi-period model, and the valuations it implies, is essential for understanding inefficiency in cooperative organizational forms. Investment is efficient given the supply of input, but economic inefficiency arises because of over-supply of input induced by suppliers...

It has been claimed that the market fosters selfishness and thereby undermines the moral basis of society. This thesis has been developed with an emphasis on market exchange. Everyday life is, however, predominantly shaped by interactions in the workplace rather than by shopping behaviour. This...

This paper studies a partial-contracting model where an agent may provide effort to increase a project´s scope before some later (operative) decisions have to be taken. Consistent with existing empirical evidence, we find a positive relationship between exogenous risk and delegation. That is,...

Very little principal-agent analysis has been done within the fisheries economic literature. This paper conducts a principal-agent analysis of fisheries. Within a standard principal-agent model, the low-cost agent must be allowed the same level of effort as under complete information. This...

Considering a principal-agent model in which the difficulty of the agent's action is better known ex interim than ex ante, we compare two contracting regimes; one with commitment to an ex ante negotiated contract, and one with an ex interim negotiated contract. The ex ante contract cannot have...

An industry is modeled in which entrepreneurs, who are heterogeneous in ability, may produce formally or informally. Two cases are distinguished, with and without labour market segmentation, for which different patterns of formal/informal supply obtain. Without segmentation, informality may...

This paper analyzes the efficient use of information in an agency relationship with moral hazard, when parties are risk-neutral. We show that, given an arbitrary information system, all relevant information from a mechanism-design point of view can be summarized by a binary statistic. We then...

Scope economies (reflecting the benefit of a multioutput firm) have been defined by Baumol, Panzar, and Willig in the context of cost functions. This paperuses Luenberger's shortage function to develop a general measure of scope economies directly from the underlying technology. The analysis...

We ask how bargainers' incentives to communicate about more efficient widget designs depend on whether they negotiate price prior to, or after, fixing the traded design. We find three effects: (1) Since communication reveals information about preferences, bargainers with little power prefer to...

This paper analyzes the recent progress in the understanding of a class of organizations known as hybrid forms. The growing literature on these forms, standing between markets and hierarchies, raises important questions about their nature and role in a market economy. Adopting a transaction-cost...