In a standard principal-agent model, we derive a new condition that relates the structure of the optimal contract to the agent's risk preferences: The optimal contract is more convex than the likelihood ratio of the performance measure if and only if the coefficient of absolute prudence is...

We consider a model of CEO selection, dismissal and retention. Firms with larger blockholder ownership monitor more; they get more information about CEO ability, which facilitates the dismissal of low-ability CEOs. These firms are matched with CEOs whose ability is more uncertain. For retention...

An increasing number of horizontal agreements involve both competitors and their common suppliers (or retailers). As vertical agreements, indirect horizontal agreements can help reduce coordination failures, but they also have the capacity to dampen competition. The negative welfare effect of...

Under closed-list proportional representation, a partyís electoral list determines the order in which legislative seats are allocated to candidates. When candidates di§er in their ability, parties face a trade-o§ between competence and incentives. Ranking candidates in decreasing order of...