Consider a firm which pays a (credit-constrained) worker for his effort over two periods. The more the firm pays in one period, the wealthier is the worker in the following period, and so the more he must then be paid for a given effort. We describe the profit-maximising contract under these...

A government may adopt extreme policies (policies lying outside the interval between the ideal points of the political parties) for electoral purposes. It can benefit when a change in policy is costly and when the opposing party cannot commit to maintaining the status quo.

This paper studies the selection of information collecting agents by policy makers in the light of two agency problems. First, it is often hard to ascertain how much effort agents have put in acquiring information. Second, when agents have an interest in the policy outcome, they may manipulate...

Civil servants have a reputation for being lazy. However, people's personal experiences with civil servants frequently run counter to this stereotype. We develop a model of an economy in which workers differ in laziness and in public service motivation, and characterise optimal incentive...