Corporate success often resembles a snowball. We show how initial luck in hiring talented people, the resulting technological advantage, superior corporate culture, and status-seeking by workers can make small initial differences generate large differences over time.

A woman assessing the wealth of a potential husband may observe some, but not all, of his wealth. She may screen, leading to status consumption and wasteful gift giving. The screening activity is costly not only for the potential husband, but also for the woman, as it reduces the wealth of the...

A firm may induce voters or elected politicians to support a policy it favors by suggesting that it is more likely to invest in a district whose voters or representatives support the policy. In equilibrium, no one vote may be decisive, and the policy may gain strong support though the majority...

This paper develops a theory of consumer boycotts. Some consumers care not only about the products they buy but also about whether the firm behaves ethically. Other consumers do not care about the behavior of the firm but yet may like to give the impression of being ethical consumers....

A worker's utility may increase with his income, but envy can make his utility decline with his employer's income. This article uses a principal-agent model to study profit-maximizing contracts when a worker envies his employer. Envy tightens the worker's participation constraint and so calls...

This paper explores the meaning and implications of the desire by workers for impact. We find that this impact motive can make a firm in a competitive labor market face an upward-sloping supply curve of labor, lead workers with the same characteristics but at different firms to earn different...

The article is forthcoming in <A href="http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VFD-4PNM471-3&_user=499884&_coverDate=09%2F15%2F2007&_alid=770199288&_rdoc=1&_fmt=high&_orig=search&_cdi=6008&_sort=d&_docanchor=&view=c&_ct=1&_acct=C000024499&_version=1&_urlVersion=0&_userid=499884&md5=8492c97b78d795d5deec06a94b66422d">Labour Economics</A>.<p><P>

We consider taxation by a utilitarian government in the presence of heterogeneous locations within a country. We show that a utilitarian government never equalizes after-tax incomes, even when it can impose group-specific lump-sum taxes. If migration is impossible, a utilitarian government may...

We consider a firm which pays a worker for his effort over several periods. The more the firm pays in one period, the wealthier the worker is in the following periods, and so the more he must be paid for a given effort. This wealth effect can induce an employer to pay little initially and more...