In this paper the author suggests that besides Frank Knight's well recognized "uncertainty" explanation of the firm, he had another one. "Moral hazard" is the central feature in the second, largely overlooked theory. The author argues, and attempts to document, that this theory is not a chance...

This paper argues that, in the middle ages, voting institutions emerged as mechanisms that allowed rulers to cooperate with subjects on mutually profitable projects. In spite of their utility, many of these voting institutions eventually declined. The authors test the model on the English...

We treat information acquisition by potential investors in initial public offerings as endogenous. With endogenous information, the critical question is why underwriters would allow investors to spend resources acquiring superior information intended solely to effect a wealth transfer. We show...