In this paper, we construct a North-South general equilibrium model of offshoring, highlighting the nexus among endogenous effort-based labor productivity and the structure of wages. Offshoring is modeled as international transfer of management practices and production techniques that allow...

We compare welfare effects of tournaments and piece rates in contracts with heterogeneous ability agents and demonstrate that tournaments that mix players of unequal abilities create league composition effect. When leagues are fixed and the time horizon sufficiently long, piece rates improve...