I analyse firms organisational choices when they face uncertainty about institutional conditions in foreign locations with heterogeneous final good producers and incomplete contracts. As firms learn about the conditions abroad, the increasing offshoring activity increases competition in the...

Synergies in production are ubiquitous in shared production processes such as those involving individuals within a team, departments within a firm, or industries within a country. Using a weakest link game with ex post bargaining to redistribute the joint surplus, we study a situation in which...

I consider an investor who can acquire a costly signal about an entrepreneur's project. The investor's problem is that uninformed investors can compete to provide funding and his contract offer conveys information to the entrepreneur about project payoffs, affecting the attractiveness of the...

Teamwork and cooperation between workers can be of substantial value to a firm, yet the level of worker cooperation often varies between individual firms. We show that these differences can be the result of labor market competition if workers have heterogeneous preferences and preferences are...

This paper addresses the question, what metrics should be used for performance evaluation and in particular how they should be weighted and combined in the presence of technological interdependencies when the agents exhibit variedly strong developed rivalry. We find that the principal reacts to...

The 'ratchet effect' refers to a situation where a principal uses private information that is revealed by an agent's early actions to the agent's later disadvantage, in a context where binding multi-period contracts are not enforceable. In a simple, context-rich environment, we experimentally...

Efforts to control bank risk address the wrong problem in the wrong way. They presume that the financial crisis was caused by CEOs who failed to supervise risk-taking employees. The responses focus on executive pay, believing that executives will bring non-executives into line — using...

The 'ratchet effect' refers to a situation where a principal uses private information that is revealed by an agent's early actions to the agent's later disadvantage, in a context where binding multi-period contracts are not enforceable. In a simple, context-rich environment, we experimentally...

This is an entry produced for the Handbook of the History of Economic Analysis, edited by Gilbert Faccarello and Heinz D. Kurz (eds). Volume 3. Cheltenham, UK and Northampton, MA, USA: Edward Elgar, forthcoming. We analyze competition as rivarly in a race, as a specific market structure, and as...

The static equilibrium dominant firm price leadership model is traced to a seminar presentation by Karl Forchheimer in 1906, who seems to have originated the concept of a dominant firm facing competition from fringe rivals maximizing profits on the basis of residual demand--industry demand less...