We consider a principal who deals with a privately informed agent protected by limited liability in a correlated information setting. The agent's technology is such that the fixed cost declines with the marginal cost (the type), so that countervailing incentives may arise. We show that, with...

In this paper we present a dynamic model of subsidized credit provision to examine how asymmetric information exacerbates ineciency caused by corruption. Though designed to empower the underprivileged, the fate of such credit programs largely depends on the eciency of the credit delivery system....

Public service motivation is often considered as an argument for low- powered incentive schemes in the public sector. In this paper, we characterize the optimal contract between a public regulator and an altruistic agent according to the degree of public service motivation, when the type of the...

We extend the principal/one-agent model with countervailing incentives to a framework in which the principal deals with two agents behaving non-cooperatively and protected by limited liability. Focusing on the two-type case, we show that, beside the situation in which first best is effected even...

We analyse tax competition when a multinational firm has invested in two countries but also has an outside option, e.g., towards a third country. An interesting finding is that more attractive outside options for firms may constitute a win-win situation; the firm as well as its present host...

Incumbent firms, especially in high-tech industries, often contract and collaborate with small research units on single projects. A delicate resulting contracting decision thus is how to allocate control. This paper considers the incumbent's problem to design a research contract that specifies:...

Public service motivation is often considered as an argument for low- powered incentive schemes in the public sector. In this paper, we characterize the optimal contract between a public regulator and an altruistic agent according to the degree of public service motivation, when the type of the...