This paper studies the design of tax systems that implement a planner's second-best allocation in a market economy. An example shows that the widely used Mirrleesian (1976) tax system cannot implement all incentive-compatible allocations. Hammond's (1979) "principle of taxation" proves that any...

Transparent decision-making processes are widely regarded as a prerequisite for the working of a representative democracy. It facilitates accountability, and citizens may suspect that decisions, if taken behind closed doors, do not promote their interests. Why else the secrecy? We provide a...

This discussion paper has led to a publication in the <I>Journal of Business Ethics</I>, 2013, 117(3), 601-13.<P> Halal certification of financials product may reduce transaction costs for its buyers when it provides a trusted standard for investors that seek to comply with Islamic law. However, we show...</p></i>

In this paper, I study the wage a firm sets to attract high abilityworkers (hipo's) in situationsof unemployment. I show that the higher unemployment, the larger afirm's incentives to sorthigh and low ability workers. Moreover, workers will signal their(high) ability in situationsof (high)...

Using simple game-theoretical models, this paper studies the role of pre-determined rules for HRM policies. We consider a model in which HRM decisions affect employees' self-images and thereby their motivation. We show that in the absence of written rules, managers are too reluctant (1) to...

This discussion paper has led to a publication in <A href="http://www.sciencedirect.com/science/article/pii/S001429211200044X">'European Economic Review'</A>, 56(4), 669-90.<P>We investigate the presence of moral hazard and advantageous or adverse selection in a market for supplementary health insurance. For this we specify and estimate dynamic models for health insurance...</p></a>