It is clear that education has an important effect on wages paid in the labour market However it not clear whether this is due to the role that education plays in raising the productivity of workers (the human capital explanation) or whether education simply reflects the ability of the worker...

The paper studies information processing imperfections in a fully rational decision-making network. It is shown that imperfect information transmission and imperfect information acquisition in a multi-stage selection game yield information overload. The paper analyses the mechanisms responsible...

Using a formal principal-agent model, I investigate the relation between monetary gift-exchange and incentive pay, while allowing for worker heterogeneity. I assume that some agents care more for their principal when they are convinced that the principal cares for them. Principals can signal...

By incorporating reciprocity in an otherwise standard principal-agent model, I investigate the relation between monetary gift-exchange and incentive pay, while allowing for worker heterogeneity. I assume that some, but not all, workers care more for their principal when they are convinced that...

The seller of N distinct objects is uncertain about the buyer's valuation for those objects. The seller's problem, to maximize expected revenue, consists of maximizing a linear functional over a convex set of mechanisms. A solution to the seller's problem can always be found in an extreme point...

We analyse the role that education signals play in the transition rates from unemployment to finding a job. We compare the results for Ethnic Germans with those for foreigners from the same origin countries and Native Germans. In the first case, the two have the same labour market access but...