Aguiar, Pongou, and Tondji (2018) propose the Shapley distance as a measure of the extent to which output sharing among the stakeholders of an organization can be considered unfair. It measures the distance between an arbitrary pay profile and the Shapley pay profile under a given technology,...

We consider a setting where firms in the first stage invest in cost-reducing R&D. In the market stage, one fi rm sets a quantity, and another sets a price. We prove that the quantity-setting fi rm invests more in R&D, has a lower price, and produces higher quantity than the price-setting fi rm....

This paper considers the problem faced by a political authority that has to design a legislative mechanism that guarantees the selection of policies that are stable, efficient, and inclusive in the sense of strategically protecting minority interests. Experimental studies suggest that some of...

The rules that are employed to pass policies in legislative bodies vary widely. It is generally argued that policies that differ in complexity or importance level should be decided under different kinds of voting rules. While this question has been examined for static legislative mechanisms, an...

We study the Shapley wage function, a wage scheme in which a worker's pay depends both on the number of hours worked and on the output of the firm. We then provide a way to measure the distance of an arbitrary wage scheme to this function in limited datasets. In particular, for a fixed...

This study develops an economic model for a social planner who prioritizes health over short- term wealth accumulation during a pandemic. Agents are connected through a weighted undirected network of contacts, and the planner's objective is to determine the policy that contains the spread of...

Frequent violations of fair principles in real-life settings raise the fundamental question of whether such principles can guarantee the existence of a self-enforcing equilibrium in a free economy. We show that elementary principles of distributive justice guarantee that a pure-strategy Nash...

We derive Bertrand and Cournot equilibria in a differentiated duopoly in which each firm hires a manager to undertake research and development (R&D) and production decisions. We show that manager overconfidence and over-investment occur in each market competition. Furthermore, the Cournot game...

We examine whether owners' decisions to delegate responsibilities to overconfident managers improve welfare. We develop a duopoly model with product differentiation, where firms compete in research and development (R&D) and output . Before firms compete, each owner makes a strategic decision...