The use of equity-based compensation is an increasingly popular means by which to align the incentives of top management with those of the shareholders. However, recent theoretical and empirical research indicates that the use of equity-based compensation has the unintended consequence of...

Equity-based compensation, while inducing greater managerial effort, also provides incentives for managers to fraudulently inflate a firm's stock price. This paper examines the owners' optimal contract in the face of these conflicting incentives when it is sometimes possible for the manager to...

When attorney effort is not verifiable, previous theoretical work has found that a competitive legal services market may yield an equilibrium contingent fee that is strictly greater than the zero-profit contingent fee. However, these results require fairly sophisticated consumers who recognize...

Production requiring licensing groups of complementary patents implements a coordination game among patent holders, who can price patents by choosing among combinations of fixed and royalty fees. Summed across patents, these fees become the total producer cost of the package of patents....

A common mechanism to elicit risk preferences requires a respondent to make a series of dichotomous choices. A recurring problem with this mechanism is a frequently observed tendency to switch from the less to the more risky choice multiple times, multiple switching behaviour. We introduce an...

Consumers’ willingness to pay for postharvest-processed (PHP) raw oysters—oysters without health risks—is studied in experimental auction markets. The experimental design decomposes the effects of taste, objective risk information, and information on four PHP technologies on...

This paper reports the results of an experimental test of the Nash equilibrium prediction of voluntary provision of property rights in a contest under anarchy. Specically, the experiment investigates whether pre-commitment induces positive provision of property rights. As pre- dicted, zero...