This article explores human capital acquisition decisions when job placement helps determine competition for a worker. With asymmetric information, workers may invest in firm-specific capital without long-term contracts. Specific investment increases promotion chances (and hence wage...

When creditors do not honor human capital as collateral, firms can mediate financially by offering workers long-term wage contracts. The optimal contract specifies a wage consisting of a spot general skill component plus a component equal to the expected time-averaged value of the worker's...

This paper develops a dynamic evolutionary model in which agents make choices on the basis of relative performance criteria. We distinguish two classes of learned behavior: imitative dynamics and a new class of dynamics, "introspective dynamics." Under imitative dynamics, agents compare payoffs...

This paper considers a durable goods monopolist who can commit to prices at each date, total output, and possibly release dates for stock. The monopolist faces a finite number of arbitrarily patient consumers. Surprisingly, if the monopolist would earn. When the monopolist can also commit to...

Sticky nominal prices represent a cornerstone of many macroeconomic models. The effects of price adjustment on strategic firm interaction and the resulting price series implications are less established. This paper develops a spatial economy to analyze these interactions. In the two period...

Within a hierarchical firm structure, the paper details how the composition of a worker's skills and the (non) observability of a worker's ability affect wage and promotion paths. Promotion takes place over time and is not efficient, as employers seek to exploit their inside information about a...

We examine a monetary economy in which there is an absence of the temporal coincidence of wants, and households are free to barter. If the growth rate of the money supply is sufficiently small, monetary exchange is preferable. Nevertheless, barter may drive out money exchange even if monetary...

This paper investigates how noisy evaluation of worker skills affects human capital investments and hiring. Individuals distort investments toward skills that most managers can evaluate. Dynamically, when workers become managers, managerial expertise can become increasingly skewed over time,...

Chapter 11 structures complex negotiations between creditors and debtors that are overseen by a bankruptcy court. This paper identifies conditions under which it is optimal for the court to sometimes err in determining whether a firm should be liquidated. Such errors can affect the optimal...