In Spence's (1973) signaling by education model and in many of its extensions, firms can only infer workers' productivities from their education choices. In reality, firms also use sophisticated pre-employment auditing to learn workers' productivities. We characterize the trade-offs between...

In Spence’s (1973) signaling by education model and in many of its extensions, firms can only infer workers’ productivities from their education choices. In reality, firms also use sophisticated pre–employment auditing to learn workers’ productivities. We characterize the trade–offs...

Interne Finanzierung versus Bankkredit: Der Vorteil langfristiger Kreditbeziehungen Die Arbeit betrachtet ein Zwei-Perioden-Modell, in dem Firmen in der zweiten Periode auf externe Finanzierung angewiesen sind. Die Firmen können ihre Kreditkosten senken und die Verfügbarkeit eines Kredits in...

We study contracting between a consumer and an expert. The expert can invest in diagnosis to obtain a noisy signal about whether a low-cost service is sufficient or whether a high-cost treatment is required to solve the consumer's problem. This involves moral hazard because diagnosis effort and...

We study the location equilibrium in Hotelling's model of spatial competition. As d'Aspremont et al. (1979) have shown, with quadratic consumer transportation cost the two sellers will seek to move as far away from each other as possible. This generates a coordination problem which the...

We investigate the welfare effect of increasing competition in an anonymous two-sided matching market, where matched pairs play an infinitely repeated Prisoner's Dilemma. Higher matching efficiency is usually considered detrimental as it creates stronger incentives for defection. We point out,...