We study dynamic moral hazard where principal and agent are symmetrically uncertain about job difficulty. Since effort is unobserved, shirking leads the principal to believe that the job is hard, increasing the agent's continuation value. So deterring shirking requires steeper incentives, which...

We study dynamic moral hazard, with symmetric ex ante uncertainty and learning. Unlike Holmstrom's career concerns model, uncertainty pertains to the difficulty of the job rather than the general talent of the agent, so that contracts are required to provide incentives. Since effort is privately...

We examine buyer strategic power in the model of dynamic Bertrand-Edgeworth competition. Two sellers with a limited inventory sell to a single buyer, who has a consumption opportunity in each period. The market power of the sellers is offset by the strategic power of the buyer. By not consuming...

We consider a society where parents prefer boys to girls, but also value grandchildren. Parental sex selection results in a biased sex ratio that is socially inefficient, due to a congestion externality in the marriage market. Improvements in selection techniques aggravate the inefficiency....

Using the US Commissioner of Labor Survey of 1890, we examine household decisions and parental altruism vis-a-vis their children. Contrary to Parsons and Goldin (1989), we find that parental location choices were dictated by constraints rather than the desire to exploit child labour...

We study the incentives of parents to invest in their children when these investments improve their marriage prospects, in a frictionless marriage market with non-transferable utility. Stochastic returns to investment eliminate the multiplicity of equilibria that plagues models with...

Employment protection is often related to costs incurred by firms when they fire a worker. The stability of the employment relationship, enhanced by employment protection, is also favourable to the productivity of the job. We analyse employment protection focusing on this trade-off between...

The selection of immigrants by skill and education is a central issue in the analysis of immigration. Since highly educated immigrants tend to be more successful in host country labour markets and less of a fiscal cost it is important to know what determines the skill-selectivity of immigration....

Marriage data show a strong degree of positive assortative mating along a variety of attributes. But since marriage is an equilibrium outcome, it is unclear whether positive sorting is the result of preferences rather than opportunities. We assess the relative importance of preferences and...

The development of the unemployment rate differs substantially between OECD countries. In recent years some countries have experienced a mild increase, other countries have had a stable unemployment rate, while there are also ‘successful’ countries in which the unemployment rate has...