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 implement a laboratory experiment in which a principal has to decide on monitoring intensity and pay to investigate whether they are complements or substitutes. Wage level, monitoring intensity, and consequently the desired enforceable effort level are jointly determined by the maximization...

This paper analyzes intertemporal effort provision in two-stage tournaments. A principal with a fixed budget for prizes faces two risk-neutral agents. He observes noisy signals of effort in both periods. His goal is to maximize either total efforts (perfect substitutes) or the product of first-...

We analyze the effects of wage floors on optimal job design in a moral-hazard model with asymmetric tasks and imperfect aggregate performance measurement. Due to cost advantages of specialization, assigning the tasks to different agents is efficient. A sufficiently high wage floor, however,...