Clawbacks are contractual provisions in executive compensation contracts that allow for an ex post recoupment of variable pay if certain triggering conditions are met. As a result of regulatory responses to financial crises and corporate scandals as well as of growing shareholder pressure to...

Using a principal-agent model with two-periods, we analyze the effects of both bailouts and bonus taxation on managerial compensation and short-termism. In our model, short-termism increases expected short-term profits at the expense of expected long-term profits and is harmful not only for...

In a principal-agent model, we analyze the consequences of bonus taxes agents need to pay, limited deductibility of bonuses from company pro fits and a corporate income tax (CIT). We explore how these tax instruments a ffect managerial incentives and how they change the design of incentive...

I analyze whether or not a monitoring problem regarding abroad abatement can justify the import quotas on abroad emission certificates applied by several emission trading schemes. For this purpose I extend the Becker (1968) Crime and Punishment model by heterogeneity in the observability of...

We examine an endogenous, sunk budget extension of Myerson's (1993) two-candidate model of political competition in which candidates simultaneously allocate an exogenous level of a use-it-or-lose-it persuasive advertising resource across a homogeneous electorate of unit measure. We completely...

We propose a simple model to investigate whether an agent works harder when she is informed of the tasks' deadlines (i.e., under transparent management) or not (i.e., under opaque management). We do so in a stylized model where; 1) in each period, the agent may work at some cost, rather than...

This paper derives a government's optimal tax audit policy when taxpayers hold different beliefs about the likelihood of a tax audit. When audits are inexpensive, differences in perceived audit risk lead to stricter optimal auditing in equilibrium. If audits are relatively costly, heterogeneity...

This paper derives the optimal financial contract when an entrepreneur can evade taxes in a model of costly state verification. In contrast to previous literature on costly state verification and financial contracting, we find that standard debt contracts are not optimal when tax evasion is...

We investigate the temporal structure that maximizes the winner's effort in large homogeneous contests, thus extending Hinnosaar (2019)'s analysis of total effort. We find that the winner's effort ranges from a lower bound of 0 to an upper bound of one third of the value of the prize, depending...