Implicit contract theory has been successful in explaining wage rigidity but not unemployment. We argue that the theory has paid insufficient attention to (i) the general equilibrium aspects and (ii) constraints limiting the set of feasible contracts. Implicit, as opposed to explicit contracts,...

This paper examines optimal decision making under three different organizational forms: committees, hierarchies, an d polyarchies. Focus is on the trade-off between errors of rejecting good projects versus errors of accepting bad projects, and on the tra de-off between gains from more extensive...