Organizational structure of firms is an important topic that has been widely discussed in virtually all management disciplines. The typical view of firm organization emphasizes enhancing efficiency by fully aligning incentives of all participants to achieve a common objective. Over the years,...

This paper presents an adverse selection model in which progressive taxation enhances productive efficiency by encouraging a principal (buyer) to be less aggressive in contracting with an agent (seller). Wary of padded cost budgets, the buyer employs a hurdle-rate procurement policy. With a low...

This paper studies implications of the ratcheting effect arising in the supply chain relationship. The ratcheting effect occurs when the retailer modifies his investment in the present period to receive a favorable wholesale price in the future. In a simple model of multi-period supply chain...