This paper examines the effectiveness of cheap talk advice in recurrent relationships between a customer, and multiple experts who provide professional services with differentiated specialties (e.g, auto mechanics, physicians). Specifically, the sustainable honesty level is characterized in...

Exact inference on a single coefficient in a linear regression model, as introduced by Bekker (1997), is elaborated for the case of normally distributed heteroscedastic disturbances. Instead of approximate inference based on feasible generalized least squares, exact confidence sets are...

The purpose of this paper is two-fold. First, we compare the accuracy of previous studies that analyze the ability of the Composite Index of Leading Indicators (CLI) for predicting turning points. Alternative filters are also proposed. For these comparisons, we adapt the test developed by...

No abstract.

This paper develops and estimates a model of market conduct in the US banking industry during the 1990s. Competition in both output and factor markets is measured in a static Cournot model in the spirit of Bresnahan (1989), Shaffer (1991,1994a), Neven and Roeller (1997), and others. Banks can...

Firms often pay individuals for group-level, industry-level, or even economy-wide performance when agency theory suggests these contracts provide minimal incentive and lead to inefficient risk bearing. This paper derives a simple model of why firms might choose to implement stock options, profit...

This article uses unobserved components time series models to capture the underlying trends in the quarterly deciles of US hourly wages. Tests of stability and divergence are suggested as a means of assessing changes in inequality. The decrease in the wage gender gap is examined and the impact...

This paper argues that revenue sharing is a valuable instrument in vertically separated industries when there is intrabrand competition among the downstream firms, demand is stochastic or variable, and downstream inventory is chosen before demand is realized. In these environments, the upstream...

This paper explores how motivating an incumbent CEO to make investments that improve the effectiveness of the firm organization under his management interacts with the replacement policy of the board of directors. We characterize the optimal compensation package (including severance pay) under...

This paper studies delegation as an alternative for communication. We show how a principal may give up control rights in order to foster the efficient use of information present in an organization. We point out how the benefits of delegation vary with the congruence between agent and principal,...