Why do some leaders use praise as a means to motivate workers, while other leaders use social punishment? This paper develops a simple economic model to examine how leadership styles depend on the prevailing labor-market conditions for workers. We show that the existence of a binding wage floor...

We analyze the optimal combination of promotion tournaments and individualperformance pay in an employment relationship. An agent's effort is non-observable and he has private information about his suitability for promotion. We find thatthe principal does not provide individual incentives if it...

This paper analyzes a procurement setting with two identical firms and stochasticinnovations. In contrast to the previous literature, I show that a procurer who cannot charge entry fees may prefer a fixed-prize tournament to a first-price auction since holding an auction may leave higher rents...

In an environment where the optimal level of care is unknown, we ask under a state of the art defense which method is better able to induce parties to undertake optimal care. Assuming courts can see a noisy signal of research activities undertaken by a defendant and some of its competitors, we...