Mediator proposals can accelerate agreement and increase welfare even if the mediator is entirely uninformed. We demonstrate this by adding random mediation to the Cramton (1992) bargaining model. Mediation increases welfare by pooling types, which reduces signaling costs. When mediation is...

This paper develops a unified theory of blockholder governance and the voting premium. It explains how and why a voting premium emerges in the absence of takeovers and controlling shareholders. The model features a minority blockholder and dispersed shareholders who trade shares in a competitive...

This paper studies whether including a broad group of stakeholders in policy advisory commissions helps build consensus. It may seem that including interested parties with conflicting preferences would increase conflict, but advisory commissions reach unanimity with a surprisingly high...

In a hand-coded sample of M&A contracts from 2007-08, risk allocation provisions exhibit wide variation. Earn-outs are the least common means to allocate risk, indemnities are most common, followed by price adjustment clauses. Techniques for mitigating enforcement costs – escrows, holdbacks,...

The allocation of a co-owned company to a single owner using the Texas Shoot-Out mechanism with private valuations is investigated. We identify Knightian Uncertainty about the peer's distribution as the reason for its deterrent effect of an immature dissolving. Modeling uncertainty by a compact...

This paper endogenizes the strategic relationship between a principal (a player with authority) and an agent (a player without authority), and shows that a submissive relationship is the unique equilibrium outcome. That is, the agent voluntarily chooses a task that will increase the principal's...

Competition between heterogeneous participants often leads to low effort provision in contests. We consider a principal who can divide her fixed budget between skill-enhancing training and the contest prize. Training can reduce heterogeneity, which increases effort. However, allocating some of...

This article exclusively focuses on theme-based (sector-based) development aid to show the captured nature of foreign aid in Ethiopia and its use of something other than development: penetrate households at the individual level and control them. The paper establishes that, by creating...