This paper studies optimal task assignments in a setting where agents are expectation-based loss averse according to KoszegiRabin (2006) and KoszegiRabin (2007) and are compensated according to an aggregated performance measure in which tasks are technologically independent. We show that the...

This paper studies which social networks maximize trust and welfare when agreements are implicitly enforced. We study a repeated trust game in which trading opportunities arise exogenously and a social network determines the information each player has. We show that cohesive communities, modeled...

We present an occupational choice model with risk-averse agents who are heterogeneous in terms of skills and wealth in a setting with financial frictions. We show that high-income individuals and middle-income individuals endowed with a balanced portfolio of skills upgrade their skills so the...

According to Williamson (1975), a divisionalized and fully decentralized structure, the so called M-form, is the optimal structure via which firms that pursue diversification gain economic benefits from internalizing transactions. However, empirical evidence shows that a centralized,...

This paper shows that the relationship between social networks and cooperative trading is a two-way street. The possibility of cooperative trading enforced by third-party sanctions provides players with incentives to form costly links, and investing in costly links increases the power of...

In this paper a simple model of mergers in which synergies, private benefits and CEO power play a crucial role is proposed. A merger is modeled as a bargaining process between the acquiring and target board with the gains from a merger divided according to Rubinstein's alternating-offer game...

This paper provides a simple theoretical framework based on a new type of human capital introduced by Gibbons and Waldman (2004), called task-specific training, to understand job design. Mainly, in the presence of task-specific training, promotions might result ex-post in the underutilization of...

This article studies a principal-agent problem with discrete outcome and effort level spaces. The principal and the agent are risk neutral and the latter is subject to limited liability. We consider the ratio between the first-best social welfare and the social welfare arising from the...

This article studies a principal-agent problem with discrete outcome and effort space. The principal and the agent are risk neutral and the latter is subject to limited liability. For a given monitoring technology, we consider the maximum possible ratio between the first best social welfare to...