Corruption is usually viewed as an impediment to investment and growth. However, China's experience suggests that the issue is probably more complex: In the past government officials would go out of their way to promote investment and development. But since the start of a far-reaching...

Forward induction, as defined by Govindan and Wilson (2009), places a local dominance condition on off-equilibrium path beliefs restricting relevant strategies for an equilibrium outcome to be infinitely more likely than irrelevant ones. Meanwhile, it places no global dominance restrictions and...

It is well known that the presence of imperfect monitoring limits the possibility of making efficient agreements. When firms interact repeatedly in multiple markets, however, we show that noisy observations may improve the possibility of collusion. When observation is noisy in at least one...

This paper analyzes a multitask Principal-Agent model in which the performance measures of some tasks are subjective and relational contract is needed for incentive provision. We find that rewarding the Agent based on a subjective measure that aggregates performance on multiple tasks can help...

We consider a sequential merger game between Cournot firms with homogeneous product and quadratic cost. A large slope of the marginal cost function or a small slope of inverse market demand are both predicted to increase the incentive to merge. The profitability of any merger increases with the...