This paper characterizes the efficient sequential equilibrium when a government uses indirect control to exert its authority. We develop a dynamic principal-agent model in which a principal (a government) delegates the prevention of a disturbance—such as riots, protests, terrorism, crime, or...

We revisit and critically reevaluate the widely accepted modernization hypothesis which claims that per capita income causes the creation and the consolidation of democracy. Existing studies find support for this hypothesis because they fail to control for the presence of omitted variables....

This note studies optimal lockdown policy in a model in which the government can limit a pandemic's impact via a lockdown at the cost of lower economic output. A government would like to commit to limit the extent of future lockdown in order to support more optimistic investor expectations in...

We propose a theory of con ict in which actors balance the opportunity costs of ghting with the fear of being attacked. By mobilizing, an agent foregoes returns to her peacetime economic activity, but she can seize resources and protect herself from an attack. Opportunity costs change with the...