We analyze the welfare consequences of an increase in the commissions charged by the organizer of an auction. Commissions are similar to taxes imposed on buyers and sellers and the economic problem that results looks similar to the question of tax incidence in consumer economics. We argue,...

Politicians respond to incentives when they decide how to allocate their campaigning time and effort. The literature suggests electoral rules impact politicians' incentives. We argue that the candidate selection process is an equally important source of incentives. We develop a two-stage model...

Under closed-list proportional representation, a party's electoral list determines the order in which legislative seats are allocated to candidates. When candidates differ in their ability, parties face a trade-off between competence and incentives. Ranking candidates in decreasing order of...

This paper critically assesses the implications of contract design and risk transfer on the provision of public services under public-private partnerships (PPPs). Two results stand out. First, the alleged strength of PPPs in delivering infrastructure projects on budget more often than...

Increased competition tends to benefit all buyers with increasing product variety and decreasing prices. However, if local and external market channels compete for the same class of products, increased competition from the external market crowds out local variety. Under local monopoly, local...

This paper shows in two ways that the degree to which free-riding diminishes the performance of deterministic partnerships may be less than has been generally thought. First, a necessary and sufficient condition is provided for a partnership to sustain full efficiency. It implies that many...

We construct a general equilibrium model of firm formation in which organization is endogenous. Incentive-based wealth effects arises from lower bounds on wealth and utility, and these affect the way in which different organizational forms can divide the proceeds of production. Individuals may...

This paper develops a unifying framework to understand competition issues in network industries. It focuses on the telecom(munication) industry and takes two specific effects of this industry into account. First, the telecom industry is in continuous evolution and alliances affect not only the...

Little is known theoretically, and even less empirically, about the relationship between firm boundaries and the allocation of decision rights within firms. We develop a model in which firms choose which suppliers to integrate and whether to delegate decisions to integrated suppliers. We test...

We study frictionless matching models in large production economies with and without market imperfections and/or incentive problems. We provide necessary and sufficient distribution-free conditions for monotone matching which depend on the relationship between what we call the segregation payoff...