In this paper, we study the predictive power of electricity consumption data for regional economic activity. Using unique weekly and monthly electricity consumption data for the second-largest German state, the Free State of Bavaria, we conduct a pseudo out-of-sample forecasting experiment for...

We study the link between expected inflation and wages using novel panel data from German firms and employees. We find that pass-through - the percentage point change in wage growth given a one percentage point change in expected inflation - is small: 0.11-0.17 for firms and 0.03-0.07 for...

Empirically, compensation systems generate substantial effort despite weak monetary incentives. We consider reciprocal motivations as a source of incentives. We solve for the optimal contract in the basic principal-agent problem and show that reciprocal motivations and explicit performance-based...

We analyze a contest between two groups where group members have differing valuations for the contested rent. Generically the pivotal group member with the median valuation of the rent will not act himself but will want to send a group member that has preferences different to her own into the...

We characterize optimal incentive contracts in a moral hazard framework extended in two directions. First, after effort provision, the agent is free to leave and pursue some ex-post outside option. Second, the value of this outside option is increasing in effort, and hence endogenous. Optimal...

We address the question how much authority a principal should delegate to a manager with conflicting interests and uncertain ability in a context in which the manager has both compensation-based and reputational incentives. The optimal level of authority balances the value of the manager's...