This paper suggests a rational explanation for extreme voluntary sacrifice in situations in which the state of the world when the decision must be made is observable only by the agent. Such explanation is the cult of martyrs, heroes, and saints. This cult may get out of control and fuel...

Abstract This paper studies the optimal organizational form and the optimal type of manager by considering the nonmaterial (psychological) payoff as well as the standard material payoff for agents. I compare two organizational forms: T-form, where all agents have the same job title so that they...

In a monetary union, fiscal transfers are an important policy tool to adjust to asymmetric shocks. However, fiscal transfers cannot substitute structural reforms especially when shocks are permanent. In this way, the design of fiscal transfer systems determine whether structural reforms or...

We study the effects of a statutory wage tax sharing rule in a principal - agent framework with moral hazard (à la Holmstrom, 1979) using the approach of Bose, Pal, Sappington (2007) to model the stochastic relationship between the agent’s unobserved effort and his observed performance. The...

<Para ID="Par1">While formal decision power in most international organizations rests with the member states, the member states often delegate the preparation of decisions to international secretariats. To prepare decisions, secretariats gather and analyze information and subsequently provide the member states...</para>

Over the past three decades multilateral financial aid has become an important institutional arrangement enabling environmental cooperation between developed and developing countries. However, previous research suggests that financial institutions are largely ineffective in achieving...