This paper develops a theory of governance and inheritance within family firms based on kin altruism (Hamilton, 64). Family members weigh the payoffs to relatives in proportion to relatedness. The theory shows that family management entails both costs and benefits. The attenuated monitoring...

This paper considers competitive selection dominance: what conditions on the unconditional distribution of of a random prospect will ensure that the prospect stochastically dominates a rival random prospect conditioned on competitive selection, i.e., conditioned on the prospect's realized value...

This article, which explores how economists model a firm's reputation, elaborates the standard economic framework for investigating the corporate reputation. The firm has a reputation with specific stakeholders regarding specific characteristics. Any theory of reputation has to develop some...

Why do portfolio managers actively manage their stock portfolios? The finance literature suggests the importance of financial incentives, effort, information and career concerns. We suggest that personality can also be a factor. We perform an experiment with industry experts. The experiment...

This paper determines the conditions under which stochastic orderings of random variables, e.g., stochastic dominance and the monotone likelihood ordering, are preserved or reversed by conditioning on competitive selection. A new stochastic order over unconditional distributions is...

In uniform-price auctions of shares there exist collusive equilibria in which bidders capture the entire surplus from the auction as well as competitive equilibria in which the auctioneer captures the entire surplus from the auction. We provide experimental evidence that, in uniform-price...

We study contests in which contestants are homogeneous and have convex effort costs. Increasing contest competitiveness, by making prizes more unequal, scaling up the competition, or adding new contestants, always discourages effort. These results have significant implications: although often...

This paper considers lending to finance projects in a setting where repayment enforcement appears impossible. The loan was illegal and thus legally unenforceable. Creditors were incapable of applying private coercion to force repayment. Borrowers lacked both collateral and reputation capital....