We consider a situation where an agent's effort is monitored by a supervisor who cares for the agent's well being. This is modeled by incorporating the agent's utility into the utility function of the supervisor. The first best solution can be implemented even if the supervisor's preferences are...

We present a model where a government chooses the number of individuals to which ownership in a former state-owned firm shall be allocated. When making this decision the government maximizes the political support it gets from the firm's incumbent manager and from potential shareholders,...

The paper offers a selective survey on the incomplete contracts approach to privatization. Furthermore, a simple model of privatization to an owner-manager is developed in which different allocations of ownership rights lead to different allocations of inside information about the firm which in...

This paper deals with a special hold-up problem in privatization.

This paper deals with price--cap regulation of a monopolistic distribution grid which sells a license to some retailer. The sale of the license is a long--term incomplete contract. Both the grid and the licensee engage in relationship--specific investments before the value and costs of the...