This paper reports the results from a laboratory experiment which investigates the structure of contracts that emerge in overlapping-generation firms where future ownership is a perquisite of employment. Workers in the young generation are offered employment contracts designed by the firms'...

A normative conflict arises when there exist multiple plausible norms of behavior. In such cases, norm enforcement can lead to a sequence of mutual retaliatory sanctions, which we refer to as a feud. We investigate the hypothesis that normative conflict enhances the likelihood of a feud in a...

Institutions that form to reduce moral hazard often eliminate discretion and pool the actions of heterogeneous agents. An unintended consequence of this pooling is that agents' types cannot be determined by their actions. While in the short run such mechanisms may be optimal, in the long run...

Most countries prohibit the export of certain antiquities. This practice often leads to illegal excavation and looting for the black market, which damages the items and compromises the archaeological record. We consider the prospect of long-term antiquity leases and sales contracts with a...

Compared with other types of policy, regulation is very persistent, even when inefficient. We propose an explanation for regulatory persistence based on regulatory fog,the phenomenon by which regulation obscures information about the eects of deregulation. We construct a dynamic model of...

Economists have traditionally treated preferences as exogenously given. Preferences are assumed to be influenced by neither beliefs nor the constraints people face. As a consequence, changes in behaviour are explained exclusively in terms of changes in the set of feasible alternatives. Here the...

In a wide variety of settings, spiteful preferences would constitute an obstacle to cooperation, trade, and thus economic development. This paper shows that spiteful preferences - the desire to reduce another's material payoff for the mere purpose of increasing one's relative payoff - are...