This paper considers the allocation of two types of individuals differentiated by levels of talent within and between two countries when they choose to be workers or entrepreneurs. The equilibrium with international migrations requires both countries to be sufficiently different in talent...

We develop a new framework for the analysis of the impact of trade liberalization on the wage structure. Our model focuses on the decision of workers to accumulate firm-specific skills, by "on-the-job" training, knowing that this means their future wages will have to be negotiated, and that the...

The ratchet effect is markedly simplified by assuming that the disutility of effort is linear and that there are two types of worker. A single-period model presents the participation (individual-rationality) and incentive-compatibility constraints. In a two-period model a pooling and two types...

We consider a contracting relationship where the agent's effort induces monetary costs, and limits on the agent's resource restrict his capability to exert effort. We show that the principal finds it best to offer a sharing contract while providing the agent with an up‐front financial transfer...