We investigate the terms of exchange between the legislative branch of the government and an administrative bureau with standard operating procedures. An administrative bureau is a not-for-profit public organisation responsible for the production of a non-marketable good. Such a bureau is...

We show that, in the context of the market for a professional service, adverse selection problems can sufficiently exacerbate moral hazard considerations so that even though all agents are risk neutral, welfare can be reduced by allowing the agent to �buy the firm� from the principal....

Under contingent fees the attorney gets a share of the judgement; under conditional fees the lawyer gets an upscale premium if the case is won which is, however, unrelated to the adjudicated amount. We compare conditional and contingent fees in a framework where lawyers are uninformed about the...

We consider resource allocation within an organisation when agents have a preference for autonomy and show how delegation bears on moral hazard and adverse selection. Agents may care about autonomy for reasons of job-satisfaction, status or greater reputation of perform-ance under autonomy....

We examine an economy where professionals provide services to clients and where a professional can sell his practice to another. Professionals vary in quality, and clients in their need (or willingness-to-pay) for high-quality service. Efficiency is measured as the number of matches between...

A Bayesian supply function equilibrium is characterized in a market where firms have private information about their uncertain costs. It is found that with supply function competition, and in contrast to Bayesian Cournot competition, competitiveness is affected by the parameters of the...

We examine the effects of ex post revelation of information about the risk type or the risk-reducing behavior of insureds in automobile insurance markets both for perfect competition and for monopoly. Specifically, we assume that insurers can offer a contract with information revelation ex post,...

This paper examines entry deterrence and signaling when an incumbent firm experiences a capacity constraint, arising from either her productive efficiency or the high market demand she faces. In both cases, we demonstrate that separating and pooling equilibria can be sustained. Our results show...

We consider a model of on-the-job search where firms offer long-term wage contracts to workers of different ability. Firms do not observe worker ability upon hiring but learn it gradually over time. With sufficiently strong information frictions, low-wage firms offer separating contracts and...