Although the theory of optimal contracts and the principal agent model are now well established in the literature, empirical support for this theory has been mixed at best. We use economic experiments to test contract theory and assess the empirical relevance of two possible confounding factors...

I study the effect of economic liberalization on violent crime. The particular emphasis is on the case of India, where, in the years following 1991, there was a virtual dismantling of controls on entry and production in registered manufacturing. This was accompanied by a significant reduction in...

We compare the ability of two common compensation structures, efficiency wages (EW) and deferred compensation (DC), at inducing effort from workers. We test predictions on effort provision and elicit preferences between the two wage structures. The theoretical predictions on effort are generally...

A standard approach in economic theory is to use a formal language to prove results about an economy or a game. In this paper, model theory is used to examine interpretations of such results. The particular focus is on constructive theorems, since results established by constructive methods are...

We develop an explanation of the emergence of local norms, and theassociated phenomenon of geographical variation in behavior.Individuals are assumed to interact locally with neighbors in anenvironment with a network externality. Although many patterns ofbehavior are possible, the dispersed...

Burke, Fournier, and Prasad (2007) present evidence of star effects in the adoption and utilization of stents following their introduction in the mid-1990s. Here, we experiment with alternative constructions of star status and with additional control variables in the analysis and find further...

This paper considers the robustness of optimal decisions in a model of monopoly and a model of competitive equilibrium in a securities market. Robustness, defined as payoffs being continuous with respect to perturbations in the underlying model, fails to hold for either model. Decision rules are...