We believe that group-lending institutions have incentives to include members outside the target-group of poor households. This implies a methodological problem that is rarely taken into account in empirical studies. We apply a general household survey, and find some evidence of non-poor...

When a government cannot commit to future policies, investors face the risk of opportunistic behavior in addition to uncertain market conditions. We show that although reducing market uncertainty is sometimes essential for investment, it may aggravate problems of opportunism.

Employment of apprentices seems to follow the business cycle. An interesting question is whether this is based on an investment policy where firms recruit when the labour market indicates skill shortage. Alternatively it may be that the firms are myopic and basically hire apprentices in booming...

Consider an auction in which potential bidders must sink an entry investment before learning their values. Suppose the auction designer can make the bidders learn their value before entry. Such early information will induce screening of high-value bidders, and it will give rise to information...

Regulated firms are not necessarily willing to invest in cost minimizing technologies, but evaluate different technologies according to their impact on the information rent. In a two-type adverse selection model three kinds of investments are considered: investments that increase the probability...

Work requirements can make it easier to screen the poor from the non-poor. They can also affect future poverty by changing the poors' incentive to invest in their income capacity. The novelty of our study is the focus on long term poverty.

An adverse selection model is analysed where firms can either train or hire a skilled worker. In equilibrium the market wage is determined by supply and demand.

Two jurisdictions compete to attract shares of the R&D investment budget of a large multinational enterprise, whose investments potentially confer positive spillovers on national firms. The firm has private information both about its efficiency and about spillovers. It is shown that strategic...