We study a credence goods problem - that is, a moral hazard problem with non-contractible outcome - where altruistic experts (the agents) care both about their income and the utility of consumers (the principals). Experts' preferences over income and their consumers' utility are convex, such...

We investigate regulation as the outcome of a bargaining process between a regulator and a regulated firm. The regulator is required to monitor the firm's costs and reveal its information to a political principal (Congress). In this setting, we explore the scope for collusion between the...

We extend the theory of monopoly regulation under imperfect information to the case of customer, rather than investor, ownership. The firm's manager can exert two types of effort - a contractible effort to reduce costs, and a non-contractible effort to increase quality. The former decreases...

This paper analyses simultaneous regulation of cost and quality when firms have private, correlated information about productivity and the regulator receives a signal about quality. It is shown that managerial effort and expenditures on quality are positively correlated in the optimal contract....

The Enron scandal has raised questions regarding the adequacy of the present system of financial disclosure. At the same time, public policies increasingly use information disclosure as a regulatory device in a variety of areas beyond financial reporting. This paper provides a framework for...

This paper analyses simultaneous regulation of cost and quality when firms have private, correlated information about productivity and the regulator receives a signal about quality. It is shown that managerial effort and expenditures on quality are positively correlated in the optimal contract....

Social insurance programs typically comprise sick leave insurance. An important policy parameter is how the cost of sick leave are shared between workers, firms, and the social security system. We show that this sharing rule affects not only absence behavior, but also workers' subsequent health....

Social insurance programs typically comprise sick leave insurance. An important policy parameter is how the cost of sick leave are shared between workers, firms, and the social security system. We show that this sharing rule affects not only absence behavior, but also workers' subsequent health....

This paper analyzes the effects of the "Nordic Model" of prostitution legislation adopted in Sweden in 1999, according to which buyers only are prosecuted. We focus on various measures of violence, distinguishing between known and unknown perpetrator, indoor and outdoor crimes, and on health...

While there is no consensus concerning the legal and moral judgment towards prostitution, there is an overwhelming agreement on the need to fight sexual slavery. The paper shows the effect of clients’ punishment in the market for commercial sex (the so called neo-abolitionism or nordic...