In this paper, we consider a dynamic signaling model of an R&D market in which a researcher can choose either a safe project (exploitation) or a risky project (exploration) at each instance. We argue that there are substantial efficiency gains from rewarding minor innovations above their social...

This paper analyses three issues in strategic donor-recipient interaction motivated by the complexity of the rationale underlying aid. The first is when we have several principals with conflicting objectives. Any one principal cannot offer high powered incentives to the agent to carry out their...

The matter studied here is how, and with what implications, people may decide that they do not want to be let into secrets that concern them. They could get the information at no cost but they refuse to know. The reasoning is framed in terms of principals and agents, with the principals assumed...

The theory of agency, which has seen many recent applications in the social sciences and management literatures, is essentially a theory of failures: It seeks to understand the problems created when one party attempts to control another's behavior, given that control is costly and it often does...

We characterize optimal corporate boards when shareholders face a trade-off between improving information sharing between the board and management and reducing distortions in decision making arising out of managerial agency. We show that allocating authority to management is suboptimal....

We look for necessary properties of shareholder-value maximizing corporate boards when shareholders face a trade-off between improving information sharing between the board and management and reducing distortions in decision-making arising out of managerial agency. We draw a distinction between...

We study how the proximity of elections affects policy choices in a model in which policymakers want to improve their reputation to increase their reelection chances. Policymakers' equilibrium decisions depend on both their reputation and the proximity of the next election. Typically, incentives...

To a very large extent, politics is agency. Indeed, agent-principal relationships pervade public and public-private behavior. This paper reviews the extensive but not yet integrated literature applying agency concepts to political settings. This includes agency in definitions of politics or...

In the present article, Tiebout meets Laffont and Tirole in the land of Fiscal Federalism. We use a non-trivial Principal-Multi-Agent model to characterize the optimal intergovernmental grant schedule, when the cost of local public goods depends on hidden characteristics and actions of local...

The first scholars to propose, explicitly, that a theory of agency be created, and to actually begin its creation, were Stephen Ross and Barry Mitnick, independently and roughly concurrently. Ross is responsible for the origin of the economic theory of agency, and Mitnick for the institutional...