This paper studies the incentives for international cooperation if (some) countries prefer a more equitable distribution of per capita emission levels. The impact of such an equity preference is analyzed first for a bilateral, and then for a multilateral environmental problem. We show that -...

We propose a method to estimate the capitalized value of the architectural design quality of a neighbourhood. Our economic design premium is identified by spatially differentiating property prices and design quality within neighbourhoods and comparing the differences across neighbourhoods. We...

How do firms motivate their employees to be productive? The conventional wisdom is that workers respond to monetary incentives—"Pay them more and they will work harder." However, a large and growing body of empirical evidence from laboratory and field experiments, surveys, and observational...

What is the motivational effect of imposing a minimum effort require- ment? Agents may no longer exert voluntary effort but merely meet the requirement. Here, we examine how such hidden costs of control change when control is considered legitimate. We study a principal- agent model where control...

Sick-pay is a common provision in labor contracts. It insures workers against a sudden loss of income due to unexpected absences and helps them smooth consumption. Therefore, many governments find sick-pay socially desirable and choose to mandate its provision. But sick-pay is not without its...

Under asymmetric information, dishonest sellers lead to market unraveling in the lemons model. An additional cost of dishonesty is that language becomes cheap talk. We develop instead a model where people derive utility from actions (what they say), as well as from outcomes, so talk is costly....

In economics, the standard approach to language is that talk is cheap. Here, instead, language is a social convention that affects utility. Unless language is used in its ordinary sense, it cannot help to coordinate actions because there is no way of decoding it. This points to a unique...

In this paper we argue that authorities aid cooperation by means ofdirect coordination or the enforcement of re-commitment devices suchas contract laws.Credible threats of violence allow this role. In alocal interaction model, an authority forms if mutually connected individuals with sufficient...

This paper examines the conception of individuals as being of certain types in Harsanyi'stransformation of games of incomplete information into games of complete information. Itargues that while the conception of the individual in games of complete information offerspotential advances over the...

A well known and established model in communication policy in sociology and marketing is that of opinion leadership. Opinion leaders are actors in a society who are able to affect the behavior of other members called followers. Hence, opinion leaders might have a considerable impact on the...