This paper offers an introduction to game theory for applied economists. The author gives simple definitions and intuitive examples of four kinds of games and their corresponding solution concepts: Nash equilibrium in static games of complete information; subgame-perfect Nash equilibrium in...

In this paper, the author summarizes four new strands in agency theory that help him think about incentives in real organizations. As a point of departure, The author begins with a quick sketch of the classic agency model. He then discusses static models of objective performance measurement that...

Susan Carleton Athey is the 2007 recipient of the American Economic Association's John Bates Clark Medal, which is "awarded biennially to that American economist under the age of forty who is adjudged to have made the most significant contribution to economic thought and knowledge." I have had...

Both transaction cost-economics and property-rights theories offer explanations of the boundaries of the firm based on ideas of ex post bargaining and holdup. These theories are quite distinct in their empirical predictions, but neither offers a satisfactory account of a large variety of...