Within a hierarchical firm structure, the paper details how the composition of a worker's skills and the (non) observability of a worker's ability affect wage and promotion paths. Promotion takes place over time and is not efficient, as employers seek to exploit their inside information about a...

We examine a monetary economy in which there is an absence of the temporal coincidence of wants, and households are free to barter. If the growth rate of the money supply is sufficiently small, monetary exchange is preferable. Nevertheless, barter may drive out money exchange even if monetary...

This paper investigates how noisy evaluation of worker skills affects human capital investments and hiring. Individuals distort investments toward skills that most managers can evaluate. Dynamically, when workers become managers, managerial expertise can become increasingly skewed over time,...

Chapter 11 structures complex negotiations between creditors and debtors that are overseen by a bankruptcy court. This paper identifies conditions under which it is optimal for the court to sometimes err in determining whether a firm should be liquidated. Such errors can affect the optimal...

This paper examines the strategic promotion and wage decisions of employers when employees may be more valuable to competing firms. Competing employers must incur a cost to learn the quality of their match with a manager. Promotion signals that workers are potentially valuable managers in other...