Late 19th century investors demanded compensation to invest in countries with poor institutional protection of property rights. Using the monthly stock returns of 1,808 firms located in 43 countries but traded in London between 1866 and 1907, we estimate the country-specific cost of capital. We...

We present new evidence on how generalized trust is formed. Unlike previous studies, we look at the explanatory power of economic institutions, we use newer data, we incorporate more countries, and we use instrumental variables to handle the causality problem. A central result is that legal...

We suggest a full consolidation approach that takes into account the property rights structure whithin the subsidiaries, in particular, the majority requirements on restructurings. Our approach employs a property rights index based on cooperative game theory.

We study a laboratory social dilemma game in which incentives to steal from others lead to the socially inefficient diversion of resources from production unless the members of a given mini-society can abide by norms of non-theft or engage in low cost collective protection of their members'...

We study the economics of employment relationships through theoretical and empirical analyses of an unusual set of firms, large law firms. Our point of departure is the property rights approach that emphasizes the centrality of ownership's legal rights to control important, nonhuman assets of...

This paper extends the Grossman-Hart-Moore model to suite a specific trilateral trade transaction. In this transaction a downstream producer produces the final good using inputs from two different upstream suppliers. Moreover one of the upstream supplier needs an input from the other upstream...

This paper introduces the notion of surprising institutions. Because we often carry incorrect beliefs about the world surrounding us and we are therefore often mistaken about the nature of the institutional structure facing us. The story told in this paper shows that an institution may come as a...

For many decades, Ingemar Ståhl was a well-known economist in Sweden. He introduced new perspectives into research, teaching and public debate. He made his presence felt in areas as diverse as housing policy, defense economics, energy policy, financial economics, industrial policy, higher...

We review the literature on public sector outsourcing to explore if the theoretical predictions from the incomplete contracts literature hold up to recent empirical evidence. Guided by theory, we arrange services according to the type and magnitude of their contractibility problems. The...

Over a quarter of the world's population lives in economies that have undertaken transitions from central planning to market economies. These transitions entail far-reaching and complex changes in social, economic and political institutions and have had widely divergent outcomes. Important...