A monopolist is treated as a nexus of contracts with team production. It has one owner-manager who is the employer of two employees. A team production problem is present if the employer is a “managerial lemon.” If the team production problem is solved, the employer is a “managerial...

Tournaments are commonly used in the workplace to determine promotion, assign bonuses, and motivate personal development. Tournament-based contracts can be very effective in eliciting high effort, often outperforming other compensation contracts, but they can also have negative consequences for...

This paper revisits a particular norm of behaviour underlying the well known model of kinked demand. We show that under some standard regularity conditions this norm of behaviour sustains the efficient outcome in all symmetric games.

Many economic, political and social environments can be described as contests in which agents exert costly efforts while competing over the distribution of a scarce resource. These environments have been studied using Tullock contests, all-pay auctions and rank-order tournaments. This survey...

This paper constructs a model where entrepreneurial innovations are sold into oligopolistic industries and where adverse selection problems between entrepreneurs, venture capitalists and incumbents are present. We first show that aggressive development of a basic innovation by better informed...

Trial-based tournament is a widespread hiring mechanism in organizations. Upon a job opening, an applicant is tried out at the job, then swaps with another competing applicant, and so on, with each non-competing worker holding the same position across trials. The job is offered to the applicant...