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We embed a simple incomplete-contracts model of organization design in a standard two-country perfectly-competitive trade model to examine how the liberalization of product and factor markets affects the ownership structure of firms. In our model, managers decide whether or not to integrate...
Persistent link: https://www.econbiz.de/10010574430
We model technological progress as an external effect of organizational design, focusing on how factories, based on labor division, could spawn the Industrial Revolution. Dividing labor, as Adam Smith argued, facilitates invention by observers of production processes. However, entrepreneurs...
Persistent link: https://www.econbiz.de/10011096894
We present sufficient conditions for monotone matching in environments where utility is not fully transferable between partners. These conditions involve complementarity in types not only of the total payoff to a match, as in the transferable utility case, but also in the degree of...
Persistent link: https://www.econbiz.de/10005227869
We present sufficient conditions for monotone matching in environments where utility is not fully transferable between partners. These conditions involve not only complementarity in types of the total payoff to a match, as in the transferable utility case, but also monotonicity in type of the...
Persistent link: https://www.econbiz.de/10005231903
Persistent link: https://www.econbiz.de/10014526987
In the “Knightian” theory of entrepreneurship, entrepreneurs provide insurance to workers by paying fixed wages and bear all the risk of production. This paper endogenizes entrepreneurial risk by allowing for optimal insurance contracts as well as the occupational selfselection. Moral hazard...
Persistent link: https://www.econbiz.de/10004972882
We study US divorce rates, which despite the continuing rise in female labor force participation (FLFP), have been falling since the mid-1980s, reversing a two-decade trend. A cross section of U.S. states for the year 2000 displays a negative relationship between the divorce rate and FLFP. We...
Persistent link: https://www.econbiz.de/10004972884
In most contemporary economies loan contracts cannot mandate imprison- ment or other non-pecuniary punishments for defaulting debtors. A possible rationale for contracting restrictions of this type is that imprisonment imposes negative externalities on individuals not party to the original loan...
Persistent link: https://www.econbiz.de/10004972892
Divorce rates in the U.S. have been falling for the past decade, while female labor force participation rates have been rising. Aggregate data for US states show that in 2000, divorce rates across states are negatively correlated with female labor force participation rates, even after...
Persistent link: https://www.econbiz.de/10005443377
This paper provides evidence that market conditions matter for organization design by studying how trade policy affects vertical integration. We embed an incomplete-contract model of firm boundaries into an international trade framework. Integration decisions are driven by a tradeoff between...
Persistent link: https://www.econbiz.de/10010779521