We analyze endogenous lobby formation within a slightly modified version of the "special interest politics" model of Persson (1998). In our model the interest groups hold different fixed endowments of an "infrastructure good" which is a complement in consumption of the local public good. For any...

We extend a simple version of the citizen candidacy model (developed by Osborne-Slivinski (1996) and Besley-Coate (1997)) to an asymmetric information setting, in which the type of a given individual is assumed to be private information. Focusing on a particular class of perfect Bayesian...

In a sharing game the players' choices yield a revenue, each player's choice carries a cost, and a player's payoff is a portion of the revenue minus the player's cost. Such games are appealingly simple devices for partially aligning individual incentives with organizational goals, but their...

In this paper, we consider an incumbent firm facing potential entry in a vertical differentiation model a la Mussa and Rosen where consumers differ only by their intensity of preference for quality. We ask whether the incumbent firm has the incentive to adopt a multi-product strategy in order to...

This paper analyzes equilibria in sequential take-it-or-leave-it sales when demand is stochastic. It is shown that equilibria in this sales mechanism, unlike in sequential auctions, trade-off allocative efficiency and competing buyers' opportunities to acquire an item to be sold, permitting...

In an ongoing organization, such as a large law partnership firm, employees are motivated not only by current rewards but also by the prospect of promotion, and the opportunity to make the rules in the future. This leads to a recursive contract design problem in an overlapping generations...

This paper characterizes the utility possibility frontier resulting in a model of private voluntary provision of a public good. It is shown that ex-ante lotteries over resource distributions among the agents can be Pareto improving. A corollary is that an equal distribution of resources among...

R&D is typically characterized by uncertainty about the existence and timing of the innovation (``fundamental R&D"). I show that these uncertainties dampen R&D investment, which may exhibit non-monotonic dynamics, possibly converging to a steady state level. In fundamental R&D, increased rivalry...

In the rational expectations equilibrium of this paper, agents have private information and differing information partitions and therefore assign differing conditional distributions to asset payoffs and other economic variables relevant to their investment choices. Standard asset pricing models...

We present a model of cooperative production in which rational agents might carry out sabotage activities that decrease output. We provide necessary and sufficient conditions for the existence of a Nash equilibrium without sabotage. It is shown that the absence of sabotage in equilibrium depends...