As the Covid-19 pandemic takes its disproportionate toll on African Americans, the historical perspective in this working paper provides insight into the socioeconomic conditions under which President-elect Joe Biden’s campaign promise to “build back better” might actually begin to deliver...

The neoclassical market economy fails to achieve full employment. Therefore, the job guarantee schemes have become the inevitable tools to achieve full employment. The success of a scheme needs an analytical framework to run. The paper explains and gives the analytical framework to it. A few...

Previous experimental studies have shown that centralized management that a legitimate enforcer implements can be effective in improving cooperation in social dilemmas. The current study examines whether the presence of peer punishment opportunities, especially the chance of retaliating the...

In the decade after the Civil Rights Act of 1964, African Americans made historic gains in accessing employment opportunities in racially integrated workplaces in U.S. business firms and government agencies. In the previous working papers in this series, we have shown that in the 1960s and...

Bebchuk and Fried (2004) argue that executive compensation is set by CEOs themselves rather than boards on behalf of shareholders, since many features of observed pay packages may appear inconsistent with standard optimal contracting theories. However, it may be that simple models do not capture...

This paper develops a framework that delivers tractable (i.e. closed-form) optimal contracts, with few restrictions on the utility function, cost of effort or noise distribution. By modeling the noise before the action in each period, we force the contract to provide correct incentives...

This paper presents a unified theory of both the level and sensitivity of pay in competitive market equilibrium, by embedding a moral hazard problem into a talent assignment model. By considering multiplicative specifications for the CEO's utility and production functions, we generate a number...

We study optimal compensation in a fully dynamic framework where the CEO consumes in multiple periods, can undo the contract by privately saving, and can temporarily inflate earnings. We obtain a simple closed-form contract that yields clear predictions for how the level and...

This paper shows that the rise in U.S. CEO pay from 1980 to 2003 is only partially explained by competition for profit-producing talent in the labor market. This conclusion is obtained by removing unintended data biases from tests of the only theoretical model in the literature that relates...