GAAP mandates a variety of departures from historical cost valuation. We consider a simple model that produces corresponding variety, depending on prevailing regulatory objectives and economic conditions. The model entails entrepreneurial investment in an asset followed by private information...

We examine the effects of a systematic increase in the agents operating costs in a standard agency setting with moral hazard. We identify conditions under which the agent benefits from the increase in his costs. Perhaps more surprisingly, we show that the principal and he agent can both benefit...

We investigate when identical agents will be treated asymmetrically in a simple team setting. Asymmetric treatment is optimal when the agents individual contributions to team performance are complements. Symmetric treatment of identical agents is optimal when the agents contributions are...

We demonstrate the value of equal pay policies in teams, even when team members have distinct abilities and make different contributions to team performance. A commitment to compensate all team members in identical fashion eliminates the incentive that each team member otherwise has to sabotage...

"We demonstrate the value of "equal pay" policies in teams, even when team members have distinct abilities and make different contributions to team performance. A commitment to compensate all team members in identical fashion eliminates the incentive that each team member otherwise has to...

We characterize the optimal piece-rate contract in the canonical moral hazard setting with a wealth-constrained, risk averse agent. The contract is shown to have a simple, intuitive characterization in a structured, but broad, class of settings.

We show that a lender often experiences increasing marginal returns to screening in a standard setting where the lender decides how intensively to screen the projects of prospective borrowers. The increasing marginal returns imply that even small changes in industry parameters can produce large...