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...

The collaboration among people is often subject to shirking; the net gain from the collaboration depends on the contract governing it. I argue that the entrepreneur assumes the role of the residual claimant because his actions are more costly to monitor than those of the factors with which he...

Using property-rights tools, this paper develops a theory of the transition from despotic to rule-of-law regimes, relying on the notion that rulers and subjects are interested in maximizing wealth. Keeping subjects in check enhances despots' internal security, but at the cost of lower output,...

We distinguish between discovery information and private foreknowledge in the valuation of initial public offerings of corporate securities. An underwriter gathers discovery information to value and price the issue. The issuing firm relies on this information to make the optimal investment...

Contract stipulations tend to be subject to commodity standards. Standards make it clearer what transactors have agreed upon. They also bring stipulations from different contracts under a common denominator. The lower the cost of measuring an attribute and the wider the range of its application,...

These volumes gather together a selection of autobiographical essays written by significant economists whose work is generally recognized to be at the forefront of the discipline as we enter the twenty-first century. The essays are largely based on introductions to volumes in the Edward Elgar...

The standard neoclassical model of economics is incapable of explaining why one form of organisation arises over another. It is a model where transaction costs are implicitly assumed to not exist; however, transaction costs are here defined as the costs of strengthening a given distribution of...

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. We test the model on the English parliament and...