Organizational theory suggests that authority should lie in the hands of those with information, yet the power to transfer authority is rarely absolute in practice. We investigate the validity and application of this advice in a model of optimal contracting between an uninformed principal and...

Timing is crucial in situations ranging from currency attacks, to product introductions, to starting a revolution. These settings share the feature that payoffs depend critically on the timing of a few other key players - and their moves are uncertain. To capture this, we introduce the notion of...

Friedman (1970) suggests that firms ought not divert profits towards public goods since shareholders can better make these contributions themselves. Despite this, activist shareholders are increasingly successful in persuading firms to be "socially responsible." We study firm behavior when...

We anlayze Varian's (1980) Model of Sales, and show that when the number of uninformed consumers increases, prices become less competitive for all consumers. Thus, the influx of uninformed consumers generates a negative externality increasing the prices paid by informed consumers.

Why would the US threaten punitive tariffs on luxury autos to implement a market share target in auto parts? We show that by making threats to a linked market, a market share may be implemented with fairly weak informa- tional and administrative requirements. Moreover, such policies can be both...

We study vote buying by competing interest groups in a variety of electoral and contractual settings. While increasing the size of a voting body reduces its buyability in the absence of competition, we show that larger voting bodies may be more buyable than smaller voting bodies when interest...