We analyze an environment plagued by double moral hazard where the worker's effort level and the employer's monitoring level are not contractible. In such an environment, the employer tends to over-monitor thereby inducing low effort. To ease the latter problem, the employer may choose to...

The coronavirus epidemic has instigated an economic crisis emanating from public health policies involving economic lockdown as well as behavioral reactions of workers and employers. The developed world has not seen such an extent of economic damage since at least the Second World War. We...

We analyze an overlapping generations model which explicitly includes a secondary asset market. The economy is affected by a onetime shock which causes some of these assets to become toxic. As a response the government may intervene by buying these assets at market value and removing them from...

The article is concerned with understanding the impact of social preferences and wealth inequality on aggregate economic outcomes. We investigate how different manifestations of societal other-regarding preferences affect labor relationships and incentive contracts at the microeconomic level and...

The article is concerned with understanding the impact of social preferences on the optimal organizational design of firms. We consider a moral-hazard environment with inferiority averse workers. The integration of workers in one organizational unit yields productive complementarities but also...