Rewards to prevent supervisors from accepting bribes create incentives for extortion. This raises the question whether a supervisor who can engage in bribery and extortion can still be useful in providing incentives. By highlighting the role of team work in forging information, we present a...

This paper studies the optimal structure of spectrum charges under the information asymmetry between the government and firms, extending the model of Yoon and Lee (2005). In our model, the government assigns the spectrum to the firms in the first stage during which the demand is not realized yet...

In a principal-agent framework, we explain different managing styles. In our model, there are two vertical tasks -- an upstream task for improving the project's potential environment, and a downstream task for implementing the project. The downstream task must be done by the worker, but the...

Using an agency model, we show how delegation, by generating additional private information, improves dynamic incentives under limited commitment. It circumvents ratchet effects and facilitates the revelation of persistent private information through two effects: a play-hardball effect, which...

This paper provides an economic rationale for overachieving behavior in non-professional activities in the labour market. The intrinsically motivated worker uses his achievement in the non-professional activity to signal his work ethic. When the worker‘s career concern is weak, he exerts no...

We study the optimal hierarchical structure of an organization under limited commitment. The organization cannot make a long term commitment to wages and output levels, while it can commit to its hierarchical structure. We show that the optimal hierarchical structure is horizontal when it is...