We examine the power of incentives in bureaucracies by studying contracts offered by a bureaucrat to her agent. The bureaucrat operates under a fixed budget, optimally chosen by a funding authority, and she can engage in policy drift, which we define as inversely related to her intrinsic...

Before embarking on a project, a principal must often rely on an agent to learn about its profitability. We model this learning as a two-armed bandit problem and highlight the interaction between learning (experimentation) and production. We derive the optimal contract for both experimentation...

Rewards to prevent supervisors from accepting bribes create incentives for extortion. This raises the question whether a supervisor who can engage in bribery and extortion can still be useful in providing incentives. By highlighting the role of team work in forging information, we present a...

A principal hires an agent to learn about the cost of a project (experimentation) and then to execute it (production). The agent is privately informed about the probability that the cost is low, with the high-type agent being relatively more optimistic than the low type. The agent also engages...

We model the economics of the effects of standards on incentives for innovative investment. We use survey data from industrial respondents to parameterize our model, allowing us to explain and predict effects of technology standards on investment in the development of technology and thereby...

Recognizing and understanding the seminal role that the Kennedy tax cuts and those 15 years of inflation played in the cascade of deregulation and class entrenchment that put us where we are is necessary for plotting appropriate course corrections, but it is not sufficient.Identification of the...

Here is an early sample of a work in progress: a masterclass in applied economic theory and policy analysis—wrapped in the great American novel. In five acts, the novel takes its readers through an important quarter century of the American experience from the perspectives of five close family...

Here is an early sample of a work in progress: a masterclass in applied economic theory and policy analysis—wrapped in the great American novel. In five acts, the novel takes its readers through an important quarter century of the American experience from the perspectives of five close family...

This essay uncovers an important piece of an enduring puzzle: Why, beginning in the mid-1960s, did American managers turn away from long-term competitiveness and become fixated on measures of short-term performance? The legacy of this pivot can be seen half a century later in slower productivity...

This paper models pre-invention-insight research effort and explores the proposition that competition among potential inventors, who can freely enter into the discovery process and who freely share their ideas without taking intellectual property as they strive to discover invention insights,...