Experimental results are presented for a simplified version of Hart's (1995) theory of the firm. Theory predicts that investment levels remain constant when investors' no-trade pay-offs increase, if these pay-offs are threat points. While they may decrease when no-trade pay-offs are outside...

This paper explores the hypothesis that wage differentials between skill groups across countries are consistent with a demand and supply framework. Using micro data from 15 countries we find that about one third of the variation in relative wages between skill groups across countries is...