When it is hard to assess service quality, firms will suboptimally hire low ability workers. We show that organizing as a profit-sharing partnership can alleviate these problems. Our theory explains the relative scarcity of partnerships outside of professional service industries such as law,...

This paper studies the structure of the employment relationship in organizations. It investigates the trade-off firms face between making commitments to their workforce as a whole (multilateral relational contracts), and making more limited commitments to individuals or smaller groups of...

We study entry and bidding patterns in sealed bid and open auctions. Using data from the U.S. Forest Service timber auctions, we document a set of systematic effects: sealed bid auctions attract more small bidders, shift the allocation toward these bidders, and can also generate higher revenue....