We develop a theory of firm scope in which integrating two firms into one facilitates the allocation of resources, but leads to weaker incentives for effort, compared with non-integration. Our theory makes minimal assumptions about the underlying agency problem. Moreover, the benefits and costs...

We propose a theory that emphasizes the role of managers for the production and allocation of human capital in firms. Managers invest time to train junior employees, and acquire information about the juniors' abilities that is valuable for job assignments. This dual role of managers matters...

Should two-band income taxes be progressive given a general income distribution? We provide a negative answer under utilitarian and max-min welfare functions. While this result clarifies some ambiguities in the literature, it does not rule out progressive taxes in general. If we maximize total...

Given a general utility function and income distribution, we compare two systems of income redistribution: unemployment benefits (UB) conditional on not working and basic income (BI) available to everyone. Based on strong empirical evidence we first focus on extensive margins of labor supply....

We compare two systems of income redistribution: unemployment benefits (UB) and basic income (BI). First, for a simple utility function, with both intensive and extensive margins, the unemployed are likely better off with pure BI than pure UB, regardless of labour supply elasticity and wage...

There is much evidence that relative income concern reduces subjective wellbeing and raises labour supply – 'keeping up with the Joneses' (KUJ), while increasing use of social media and growing inequality encourage comparison. Models with one or two agent –types generally miss the policy...

Few skilled workers in the UK have flexible working time – GPs are the exception – most can only choose between unemployment, or full-time work, which has changed little in recent years, while part time work is mainly unskilled. This market rigidity imposes major welfare losses, in contrast...

Unconditional basic income, or a job guarantee by government as employer-of-last-resort, are usually discussed as alternative policies, though the first does not provide the benefits of an earned income and a good job to the growing numbers in precarious- or under-employment, while the second...

This paper studies the impact of learning by doing on shakeouts in monopolistic competition. Firms have different initial costs and set prices to maximize current profits in each period. Although all firms make positive profits at the beginning and grow for a certain period of time, shakeouts...

This paper studies the incentives and the welfare effect of sharing firm-specific information in asymmetric Cournot and Bertrand oligopoly with mixed substitute and complement goods. Revealing firm-specific cost information is the dominant strategy in Cournot oligopoly, while concealing is so in...