In a globalized economy, firms move production to other countries without turning a hair. A local policy maker who seeks to avert relocation faces a dynamic problem - incentivizing the firm to remain in its home country today does not guarantee that the firm also stays in the future. We...

The unilateral introduction of an emissions price can induce firms to relocate to other countries with less stringent environmental regulation. However, firms may be able to reduce the emissions costs in their home country by investing into low-carbon technologies or equipment (abatement...

We study the economic consequences of opportunities for dishonesty in an environment where efficiency relevant behaviour is not contractible, but rather incentivized by informal agreements in an ongoing relationship. We document the repeated interaction between a principal and an agent who,...

I study the interaction between optimal procurement and outsourcing of production in small industries. First, two sellers decide about outsourcing. By outsourcing, a seller loses information about the costs of producing to his supplier. Then the buyer designs the procurement mechanism and...

We rationalize a special type of sharing information which can typically be found in markets for occupational disability insurances. There, firms share information about acceptances and rejections of an applicant. We set up a multiple-step signalling model with uninformed agents and endogenize...

We study a sequential screening problem where the agent produces an object consisting of multiple items and has a multidimensional type that he learns over time. Depending on the strength of complementarity/substitutability of the items, the optimal allocation features a different pattern of...