Consider a research lab that owns a patent on a new technology but cannot develop a marketable final product based on the new technology. There are two downstream firms that might successfully develop the new product. If the downstream firms' benefits from being the sole supplier of the new...

A principal wants two sequential tasks to be performed by wealth-constrained agents. When the tasks are conflicting (i.e., when a first-stage success makes second-stage effort less effective), the principal's profit-maximizing way to induce high efforts is to hire one agent to perform both...

We consider collective choice from two alternatives. Ex ante, each agent is uncertain about which alternative she prefers, and may be uncertain about the intensity of her preferences. An environment is given by a probability distribution over utility vectors that is symmetric across agents and...

This paper offers a non-technical discussion of the literature on the theoretical foundations of the incomplete contracting approach.

In this paper it is demonstrated that voluntary bargaining over a collective decision under asymmetric information may well lead to ex post efficiency if the default decision is non-trivial. It is argued that the default decision may be interpreted as a 'simple' contract that the parties have...

In this working paper, G. Tullock’s book “On Voting: a public choice approach” is discussed.

We discuss the literature on vertical relationships between firms from a contract-theoretic perspective.

In this working paper, T.L. Anderson and F.S. McChesney’s book “Property Rights: Cooperation, Conflict, and Law” is discussed.

In this paper we discuss "lock in effects" and "hold-up problems" (which occur when relationship-specific investments are sunk).

Kolstad, Ulen and Johnson (1990) have conjectured that exclusive use of negligence liability leads to suboptimal choice of precaution in the presence of uncertainty and that ex ante regulation can correct these inefficiencies. We complete their argument by making a mild additional premise.