We derive the optimal contract between a principal and a liquidity-constrained agent in a stochastically repeated environment. The contract comprises a court-enforceable explicit bonus rule and an implicit fixed salary promise that must be self-enforcing. Since the agent's rent increases with...

Governance: Who controls matters / Bruno Deffains, Nancy and Dominique Demougin -- Corporate governance in new enterprises or: why do some CEOs hold large equity stakes while others are paid through stock options? / Erik E. Lehmann -- Conditional allocation of control rights in venture capital...

Dem von Presse, Wirtschaft und Politik vorgeworfenen Defizit bundesdeutscher Hochschulen soll mit einem verstärkten Qualitätswettbewerb um den "Kunden" Studenten abgeholfen werden. Student(inn)en müßten dann allerdings bei der Wahl ihrer Hochschule Kriterien in Betracht ziehen, die durch...

Adverse selection induces economic limits to market substitution. If quality uncertainty persists in both internet and traditional marketplaces, a second-best equilibrium with parallel market segments may arise. Positive trade in parallel segments implies that the information cost advantage of...