We consider a regulatory problem in which there is a hierarchy of control. Consumers (or Congress) direct the activities of a regulator, who, in turn, oversees the activities of a monopolistic firm. Both the regulator and the firm are self-interested actors. The regulator must be motivated to...

We consider a double moral hazard problem in which the efforts of two parties, e.g., a principal who initially owns an enterprise and a risk-averse agent in the enterprise, are not verifiable. The realized value of the enterprise's random profit stream is also unverifiable. There is also no...

To examine the potential gains from a second production source, we examine how source switching is optimally structured. The model focuses on a purchaser who manages the acquisition process, an incumbent supplier, and a potential entrant or second supplier. Because the costs of the incumbent and...