This paper analyses the risk-control trade-off in corporate ownership. It presents a simple model in which large shareholders decide their share depending on their risk aversion, risk-neutral effects attached to firm size, and the effectiveness of different (external and internal) mechanisms for...

We analyze the incentives for a controlling shareholder to acquire silent or controlling shares in a competitor. When it occurs, the acquisition is detrimental to minority shareholders of his firm, or to the target, or even to both. The ownership structure of firms turns out to be a key...

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,...

In the context of public-good provision, despite noncontractibility of investments, it is possible to specify who is in charge of tasks such as construction and maintenance. We show that complementarity between the investments of the two tasks favors unbundling of tasks through different...

The paper uses the findings of psychology, behavioral economics, and behavioral ethics to revisit three main related assumptions of the rational-choice approach to equity, by developing three main points: first, not only bad people try to circumvent the law; second, behavior depends on the...

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...

We consider the transitions among intragenerational and alternative intergenerational financing and liquidity risk sharing mechanisms, in an overlapping generations model with endogenous levels of long-lived investments. The existence and characterization of a self-sustaining mechanism, stable...

Tournament incentive schemes offer payments dependent on relative performance and are intended thereby to motivate agents to exert productive effort. Unfortunately, however, an agent may also be tempted to degrade the production of his competitors in order to improve the own relative position....

A civic society is distinguished by its language and its law. In this paper I suggest a theory that links these institutions via the notion of a standard contract. The theory is based upon two observations: that contracts are compiled in words, and that more common (standardized) words are...

In the classical period, it was a duty and an honour for rich Athenians to perform liturgies - to provide services for the common good. Using a rational-actor perspective, it is shown that the origin of this practice may go back to 594 B.C., when Solomon introduced a property qualification for...