When a partnership comes to an end partners have to determine the terms of the dissolution. A well known way to do so is by enforcing a buy/sell option. Under its rules one partner has to offer a price for the partnership and the other agent can choose whether she wants to sell her share or buy...

While various liability rules of tort law provide efficient incentives to invest, breach remedies of contract law are claimed to be distortive. Since, at least in Germany, obligations law provides general rules for both contractual and tort relationships such discrepancy seems puzzling. The...

It is shown how one can effectively use microdata in modelling the change over time in an aggregate (e.g. mean consumption expenditure) of a large and heterogeneous population. The starting point of our aggregation analysis is a specification of explanatory variables on the micro-level....

We investigate a duopsonistic wage-setting game in which the firms have a limited number of workplaces. We assume that the firms have heterogeneous productivity, that there are two types of workers with different reservation wages and that a worker's productivity is independent of his type. We...

The recent introduction of the realized variance measure defined as the sum of the squared intra-daily returns stamped on some high frequency basis has spurred the research in the field of volatility modeling and forecasting into new directions. First, the realized variance is a much better...

This paper analyzes optimal incentive contracts for information acquisition and revelation. A decision maker faces the problem to design a contract that provides an expert with incentives to acquire and reveal information. We show that it is in general not optimal to reward the expert if his...

The existing literature on the comparison of tournaments and piece rates as alternative incentive schemes has focused on the case of unlimited liability. However, in practice real workers' wealth is typically restricted. Therefore, this paper compares both schemes under the assumption of limited...

This paper uses the Hotelling-Downs spatial model of electoral competition between candidates to explore competition between political parties. Two parties choose platforms in a unidimensional policy space, and then in a continuum of constituencies with different median voters candidates from...

Veto institutions are often dominated by government opponents with rival electoral and policy interests (e.g. \divided government"). I investigate the tradeoff between policy control and policy blockade when both the government and the veto party may cater to opposing special interests. The...

In this paper we study the impact of the income distribution on innovation through the demand for quality goods. For simplicity, we assume that there are two types of consumers, rich and poor. The income distribution is measured by the population share of the poor and the relative income of the...