This note responds to a comment by de Fontenay and Gans "Organizational Design and Technology Choice under Intrafirm Bargaining: Comment," on the possibility of replacement workers, published in the American Economic Review, March 2003

This chapter, which corresponds to an invited lecture at the Seventh World Congress of the Econometric Society, surveys recent theoretical developments in the use of multidimensional screening models in such applications as contract theory and pricing strategies

We offer a simple economic model of repeated barter to explore current economic exchange in Russia: individuals trade with each other in a dynamic environment where the threat of dissolving the relationship constrains the incentives to cheat. We show how the value of future interactions affects...

This paper studies equilibrium refinements in signaling games through an examination of rationalizability in derived games obtained by replacing the equilibrium path with a sure outcome that yields the equilibrium payoff to all players. The informed player chooses between the sure payoff and...

Mandated countertrade is a policy to restrict unilateral imports. A country's government thereby in effect commits domestic firms not to purchase from a foreign trading partner unless there are reciprocal sales. We argue that the policy may be a rational response to fundamental contracting...

We study competitive nonlinear pricing in a model involving simultaneously horizontal and vertical product differentiation. It is a particular case of a more general model of optimal contracting with uncertain participation that we study elsewhere (Rochet-Stole (1997))

We explore the scope of the firm in a setting where employee wage contracts are nonbinding and firms cannot contract with one another on their respective employment decisions. Specifically, we consider two divisions that have scope for beneficial interaction, and examine whether it is best for...

This paper studies managerial decisions about investment in long-run projects in the presence of imperfect information (the market knows less about such investments than the firm's managers) and short-term managerial objectives (the managers are concerned about the short-term stock price as well...