The paper describes situations where commitment via delegation is beneficial, even when the delegation is unobservable and the players have the option to play the game themselves. The potentiual for such benefits depends on the type of delegation, incentive versus instructive, the possibility of...

A common feature of recent growth models is the existence of externalities associated with human capital. Each worker, in choosing his level of schooling or occupation, ignores the impact of his choie on future generations. Thus, in general, the level of investment in human capital is...