We investigate the economic importance of implicit quality incentives in an agricultural market that lacks the institutional capacity for measuring quality verifiably. We measure the magnitude of implicit price premiums for quality, and we distinguish empirically between hedonic-pricing and...

Economic development is associated with an increase in the share of workers in salaried jobs. This process may be accompanied by a reduction in wage fluctuations if labor contracts are used as income smoothing mechanisms. This paper tests to what extent salaried jobs help reduce the volatility...

Based on the methodology of Beaudry and DiNardo (1991), this paper investigates the relative importance of the spot market and implicit contracts in the determination of British real wages. Empirical work is carried out separately for males and females with individual level data taken from the...

In this paper we explain the prevalence of explicit contracts of employment, particularly those that embody high- rather than low-powered incentives and clauses that supersede the common law defaults. Our analysis is based on an understanding of two fundamental problems that arise when agency...

We explore the role of firms in insuring non-verifiable output. As a device that allows workers to commit to the delivery of their output, the firm arises endogenously as an alternative to the market if workers are sufficiently risk averse and the firm can base its incentive payments on good...

After a brief survey of the Japanese literature on Sraffa, the author explains how his own theory of the microfoundations of Keynesian macro-economics was influenced by Sraff's view of competitive markets. This view can be interpreted that firms perceive kinked demand curves. It is emphasized...

This article studies financial schemes for building public works in the 1840s. The study of the Portuguese case clearly illustrates the importance of implicit contracts with governments in peripheral Europe, shedding light on solutions for financing the provision of public goods. Building roads...

We employ a unique dataset of 6,669 credit assessments for 3,542 small businesses by nine banks using an identical rating model over the period 2006-2011 to examine (i) to what extent loan officers use their discretion to smooth credit ratings of their clients, and (ii) to assess whether this...