We derive the optimal contract between a principal and a liquidity-constrained agent in a stochastically repeated environment. The contract comprises a court-enforceable explicit bonus rule and an implicit fixed salary promise that must be self-enforcing. Since the agent’s rent increases with...

An mehreren Orten in den USA entstanden in den vergangenen Jahrzehnten Zentren privater Forschungs- und Gründungsaktivitäten, von denen das Silicon Valley südlich von San Francisco wohl das bekannteste ist. Nahe der privat finanzierten Stanford University entstand ein Forschungs- und...

This paper investigates parole decisions when the offender may commit a second crime after having been set free. A convicted person is discharged earlier if the cost of the crime declines or the cost of the imprisonment increases. More dangerous offenders will be dismissed later unless the...

Dem von Presse, Wirtschaft und Politik vorgeworfenen Defizit bundesdeutscher Hochschulen soll mit einem verstärkten Qualitätswettbewerb um den Kunden Studenten abgeholfen werden. Student(inn)en müßten dann allerdings bei der Wahl ihrer Hochschule Kriterien in Betracht ziehen, die durch...

The current study integrates the repeated game approach to implicit contracts and the analysis of explicit bonus rules based on subjective performance evaluation to determine the optimal structure of the compensation scheme for the average white- collar employee. In contrast to previous...

<title>Abstract</title> <italic>Fair employment policies constrain employee selection: specifically, applicants’ professional experience can be a substitute for formal education. However, reflecting firm-specific job requirements, this substitution rule applies less strictly to applicants from outside the firm....</italic>

The O-Ring theory provides a framework for analyzing the effects of team production on the emergence of firms in the New Economy. Given risk-aversion of the potential team members, the productive advantage of perfect ability matching in teams suffices to establish an equilibrium which separates...

Adverse selection induces economic limits to market substitution. If quality uncertainty persists in both internet and traditional marketplaces, a second-best equilibrium with parallel market segments may arise. Positive trade in parallel segments implies that the information cost advantage of...