When it is hard to assess product quality, firms will sub-optimally hire low ability workers. We show that organizing as a profit-sharing partnership can alleviate these problems. Our theory explains the historical prevalence of profit sharing in professional service industries such as law,...

We examine the interaction between two forms of hospital regulation and their effect on hospital behavior. Because reimbursement under federal Medicare regulation is a fixed fee per diagnosis, hospitals are encouraged to behave more like cost centers and reduce cost through shorter average...

During the first session of the 111th Congress (Jan. 6-Oct. 30), the Green Bag will be working out the kinks in a new project: FantasyLaw. We are looking for a few test subjects to help us - to share the joys of playing the beta version of FantasyLaw. If you know (or would like to know) enough...

We consider the impact of history on the survival of a monopolist selling single units in discrete time periods, whose quality is learned slowly. If the seller learns her own quality at the same rate as customers, a sufficiently bad run of luck could induce her to stop selling. When she knows...

A bilateral danger of underperformance exists when two parties sink investments with payoffs dependent on the behavior of the other. There are five general categories of defense against that danger: (1) Legal action against a misbehaving co-investor; (2) Reliance on a reputation for...

This paper centres around the question of ownership of firms and managerial competition and how these affect manager and employees' incentives to invest in human capital. We argue that employee's incentives in human capital investment are affected by both ownership and competition since both...

We derive a model in which firms operate in an epidemic environment and internalize infections among their employees in the workplace. The model is calibrated to fit the properties of the Covid-19 epidemic. We show that firms have incentives to fight against infections and can do so very...

We derive a model in which firms operate in an epidemic environment and internalize infections among their employees in the workplace. The model is calibrated to fit the properties of the Covid-19 epidemic. We show that firms have incentives to fight against infections and can do so very...

This study examines the impact of bond markets on both bank profit and cost efficiency. By employing the stochastic frontier approach and utilizing a large micro dataset for 926 banks covering 27 economies from the Asia and Pacific region over the period from 2004 to 2017, we find that both the...

Forest fuel defined as branches and tops (GROT) of harvested trees represents a large share of forest biomass and is increasingly viewed as a potential energy source. This study assesses the economic potentials of forest bioenergy production in Swedish forests, using a network data envelopment...