It is often claimed that (i) managers work too hard on operational issues and do not spend enough effort on strategic activities and (ii) something can be done about this by introducing nonfinancial performance measures as for instance with a balanced scorecard. We give an explanation for both...

Recent work in the field of mechanism design has led some researchers to propose institutional changes that would permit parties to enter into nonmodifiable contracts, which is not possible under current contract law. This paper demonstrates that it may well be socially desirable not to enforce...

The paper analyzes the canonical hold-up model of Hart and Moore (1988) under the assumption that the courts can verify delivery of the good by the seller. We show that the first best can be achieved using simple "option contracts" which give the seller the right to decide whether or not trade...

The paper argues that the allocation of ownership rights affects the distribution of information. This can explain some differences in efficiency between a nationalized and a privatized firm. Suppose the government wants to commit to a subsidy scheme which gives some cost- saving incentives to...