We apply recently proposed individual welfare measures in the context of preference heterogeneity, derived from structural labour supply models. Contrary to the standard practice of using reference preferences and wages, these measures preserve preference heterogeneity in the normative step of...

We provide causal evidence that German savings banks where local politicians are by law involved in their management systematically adjust lending policies in response to local electoral cycles. The different timing of county elections across states and the existence of a control group of...

We compare two commonly used mechanisms in procurement: auctions and negotiations. The execution of the procurement mechanism is delegated to an agent of the buyer. The agent has private information about the buyer s preferences and may collude with one of the sellers. We provide a precise...

We analyze stock market reactions to announcements of political appointments from the private sector and corporate appointments of former government officials. Using unique data on corporate affiliations and announcements of all Senate-confirmed U.S. Defense Department appointees of six...

To explain organizational decisions in multistage production processes we assume a production process with one producer and two suppliers of which one is the firm's direct supplier and the other one is the supplier of the supplier. The firm decides only on the organizational form of her direct...

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,...

Service organizations provide an environment for solving tasks given by customers. The performance of the organization is dependent on many factors including organizational structure, incentive structure and communication of knowledge within the organization. The manager assigns tasks to be...

Successful innovation is a precondition for economic prosperity. While various potential determinants of innovative activity have been considered, little empirical evidence is yet available for the influence of firm governance issues. This paper aims at filling this gap in the literature by...

This paper introduces the theory of firm organization under moral hazard into an equilibrium model of international trade with heterogeneous talents and technologies. The model is able to explain how the allocation of power and the provision of financial incentives inside firms varies within and...