The paper differs from current literature by providing a systematic analysis of the relationship between sovereign debt, financial distress and political career concerns via a novel game-theoretic model, in order to analyze the strategic behavior of governments in revealing financial distress...

In this paper, we construct a North-South general equilibrium model of offshoring, highlighting the nexus among endogenous effort-based labor productivity and the structure of wages. Offshoring is modeled as international transfer of management practices and production techniques that allow...

A celebrated result in the theory of tournaments is that relative performance evaluation (tournaments) is a superior compensation method to absolute performance evaluation (piece rate contracts) when the agents are risk-averse, the principal is risk-neutral or less risk-averse than the agents...

Using a data set containing more than 1,000 observations on CEO succession in large U.S. firms over the period 1974-1995, we examine empirically the choice between insiders and outsiders as CEO. We employ a theoretical framework in which firms value both the incentive that the contest to become...

This paper proposes an alternative to standard cardinal tournaments. The analysis contrasts "hybrid" cardinal tournaments to standard cardinal tournaments and piece rates. It shows that providing for partial insurance against common uncertainty via a hybrid tournament (in which the weights on...

We examine the strategic role of information transmission in a repeated principal-agent relationship where the agent produces information that is useful to the principal. The agent values continuous employment for the principal because he makes a relationship-specific investment that can yield...