Tournament contracts are characterized that simultaneously elicit first-best efficient effort levels and self -selection of risk-neutral heterogeneous workers into ability-specific contracts. Comparisons across self-selected ability types are shown to be sometimes necessary to attain efficiency....

In this paper, the authors contrast panics and information-based bank runs in an effort to provide a robust and empirically plausib le model of how bank runs are triggered. The model of information-bas ed runs is characterized by two-sided asymmetric information: the ban k cannot observe the...

The authors develop a model in which a large investor has access to a costly monitoring technology affecting securities' expected payoffs. Allocations of shares are determined through trading among risk-averse investors. Despite the free-rider problem associated with monitoring, risk-sharing...