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 compare the costs and benefits of profit-sharing partnerships relative to the corporate form of organization. We show that organizing as a partnership can be desirable in human-capital intensive industries where product quality is hard to observe. The theory explains the relative scarcity of...

We compare the costs and benefits of partnerships relative to the corporate form of organization. We show that organizing as a partnership can be desirable in human-capital intensive industries where product quality is hard to observe. The theory explains the relative scarcity of partnerships...

Employees learn from performing their tasks, and in the process they accumulate potentially portable human capital. If companies cannot commit to specific task assignments, they may have an incentive to assign workers to tasks that reduce the cost of retaining them but do not maximize their...

We consider a simple case of team production, where a set of workers have to contribute a single input (say labour) and then share the joint output amongst themselves. Different incentive issues arise when the skills as well as the levels of effort expended by workers are not publicly...

This paper offers an economic model of the operation of a multi-level marketing (MLM) firm in competitive and non-competitive markets. The model takes a recursive approach to analyse decision making at the distributor level. This model is used to understand basic issues in the MLM market and...

This paper suggests a holistic framework for analysis of agrarian contracts and investigates the contractual structure in transitional Bulgarian agriculture. Firstly, it incorporates the interdisciplinary New Institutional and Transaction Costs Economics (combining Economics, Organization, Law,...

This paper suggests a holistic framework for analysis of agrarian contracts and investigates the contractual structure in transitional Bulgarian agriculture. Firstly, it incorporates the interdisciplinary New Institutional and Transaction Costs Economics (combining Economics, Organization, Law,...

In models by Fershtman and Judd (1987) and Sklivas (1987), firms competing in quantities benefit strategically from commiting to managerial incentives that are biased toward revenue maximization. Little empirical evidence has been produced in support of these models, and their assumption that...

Using manager compensation disclosure and intra-family manager cooperation measures, we create indices of family-level competitive/cooperative incentives. Families that encourage cooperation among their managers are more likely to engage in coordinated behavior (e.g., cross-trading,...