We study management practices and performance of public sector organizations in Germany. For a representative sample of municipalities, we provide survey evidence for substantial heterogeneity in the use of structured management practices. This heterogeneity is not driven by differences across...

This paper was written as an editorial preface to a "Symposium on Relational Contracts", that was jointly edited by the three authors, and that will appear in the Journal of Institutional and Theoretical Economics (JITE). The Symposium contains eleven contributions to the economics of relational...

This paper studies unethical behavior by groups and provides systematic evidence on how lying decisions are affected by group size and group gender composition. We conduct an online experiment with 1,677 participants (477 groups) where group members can communicate with each other via a novel...

This paper shows that monitoring too much a partner in the initial phase of a relationship may not be optimal if the goal is to determine his loyalty to the match and if the cost of ending the relationship increases over time. The intuition is simple: by monitoring too much we learn less on how...

In this paper we analyze the frequently observed phenomenon that (i) some members of a team ("black sheep") exhibit behavior disliked by other (honest) team members, who (ii) nevertheless refrain from reporting such misbehavior to the authorities (they set up a "wall of silence"). Much cited...

We perform a theoretical and empirical analysis of the impact of transfer fee regulations on professional soccer in Europe. Based on a model on the interaction of moral hazard and heterogeneity, we show (i) how the regulations effect contract durations and wages, (ii) that contracting parties...

We analyze the impact of three different transfer fee systems on payoffs, contract lengths, training and effort incentives in European football. The different regimes, being used until 1995 (?Pre-Bosman? or P), currently in use (?Bosman? or B), and recently approved (?Monti? or M) differ with...

We analyze the role of damage clauses in labor contracts using a model in which a worker may want to terminate his current employment relationship and work for another firm. We show that the initial parties to a contract have an incentive to stipulate excessive damage clauses, which leads to ex...

Recent theoretical research has identified many ways how contracts can be used as rent seeking devices vis-à-vis third parties, but there is no empirical evidence on this issue so far. To test some basic qualitative properties of this literature, we develop a theoretical and empirical framework...

We characterize optimal incentive contracts in a moral hazard framework extended in two directions. First, after effort provision, the agent is free to leave and pursue some ex-post outside option. Second, the value of this outside option is increasing in effort, and hence endogenous. Optimal...