In many markets, including payment cards and telecommunications, service providers operate networks that support customer transactions with each other. When the two sides of a transaction belong to more than one network in common, the question arises as to which network will carry the...

We examine situations in which a party must make a sunk investment prior to contracting with a second party to purchase an essential complementary input. We study how the resulting hold-up problem is affected by the seller's information about the investing party's likely returns from its...

Economists presume that competition spurs a firm to be more efficient by forcing it to reduce its agency problems. This article investigates this presumption. It finds that the effects of competition on executive behavior can be decomposed into four effects, each of which is of potentially...

Product-market competition affects the benefits from providing incentives to managers. In particular, the best response to other firms providing strong incentives can be to provide weak incentives. Conversely, the best response to other firms providing weak incentives can be to provide strong...

We identify factors that lead to changes among corporate directors. We hypothesize that the CEO succession process and firm performance will affect board composition. Our findings are consistent with both hypotheses. When their CEO nears retirement, firms tend to add inside directors (who may be...

We examine the pricing implications of call externalities, the benefits enjoyed by the recipient of a message sent by another user. We show that, with or without a network-profitability constraint, efficient pricing requires consideration of demands, as well as costs. We present conditions under...

We study the efficiency and solvency of savings and loans institutions (thrifts). Thrifts that were inefficient (according to a nonparametric measure) were 4 1/2 times more likely than efficient thrifts to fail in the future. We also find that absent controls for lines of business pursued, stock...