Linear contracts are of particular interest to economists. They have a simple structure, yet they are very popular in practice. In this regard, plaintiff-lawyer contractual relationships are of particular interest. Lawyers' fees are mostly paid by a sharing rule and they are typically a fixed...

As an effective investment strategy, investors often invest jointly in a company by forming a syndicate. The unique feature of this paper is that it endogenizes the formation of an investment syndicate. We provide a theory on the endogenous formation of networks in investment syndication and...

The allocation of control rights is a key issue in incomplete contracts. In this paper, we add an exit option, the right of early termination, to the standard agency model for employment contracts. We address two questions: (1) Who should have this right? (2) What is the effect of its inclusion...

We investigate the determinants of cross-border venture capital (VC) performance using a large sample of 10,205 cross-border VC investments by 1906 foreign VC firms (VCs) in 6535 domestic portfolio companies. We focus on the impact of a domestic country's economic freedom on the performance of...

It is well known that an uncertain income stream will induce individuals to save if they are forward-looking. In this paper we investigate the consequences of such saving on the distribution of wealth among households. The inquiry is motivated by the fact that both the dispersion of the US...

In a Lucas (1978) model, with a Kreps-Porteus (1978) nonexpected utility, the following property of equilibrium holds generically in the space of finite-state, Markov output growth rate processes: equilibrium price of equity is distinct from that implied by any intertemporally additive...