In a credit market with enforcement constraints, we study the effects of a change in the outside options of a potential defaulter on the terms of the credit contract, as well as on borrower payoffs. The results crucially depend on the allocation of quot;bargaining powerquot; between the borrower...

We investigate vertical linkages between formal and informal financial institutions. Specifically, we study a policy that expands formal credit to informal lenders, in the hope that this will improve loan terms for borrowers who are shut out of the formal sector. We pay special attention to the...

We model political parties as adaptive decision-makers who compete in a sequence of elections. The key assumptions are that <italic>winners satisfice</italic> (the winning party in period <italic>t</italic> keeps its platform in <italic>t</italic> + 1) while <italic>losers search</italic>. Under fairly mild assumptions about losers' search rules, we show that...

This paper studies the productivity impact of a contract change for tea pluckers in an Indian plantation. The contract, implemented at the end of a three-year cycle in which contracts are generally revised, was (a) the joint outcome of negotiations between twenty unions and plantations, (b)...

This paper studies the productivity impact of a contract change. The setting is a tea plantation in India. The activity in question is tea-plucking, the output from which is measurable and contractible. Payments to pluckers consist of a baseline wage, along with piece rates per kilogram of...