I consider two seemingly unrelated puzzles; 1. Why is relative performance evaluation (RPE) used less in CEo compensation than agency theory suggests? 2. Why is sometimes, e.g., for fund managers, a mediocre performance more highly rewarded than excellence? I consider a simple tournament model,...

We develop a model of common agency with complete information and general preferences with non-transferable utility, and prove that the principals'Nash equilibrium in truthful strategies implements an efficient action. We apply this theory to construct a positive model of public finance, where...

One of the most significant and robust characteristics of decision making is persistence. An example of this is brand loyalty -- the repeat purchase of new products of the same brand. This paper attempts to show that previous explanations of this phenomenon (switching costs, habit and unobserved...

In most democracies, at least two out of any three individuals vote for the same party in sequential elections. Here I show that stands on the issues, candidates' attributes and individuals' demographics do not account for all of the persistence over time in voting decisions. I present a new...