The comparison between specific (per unit) and ad valorem (percentage) taxation has been one of the oldest issues in public finance. In Cournot markets, with deterministic costs structures, onventional wisdom has it that ad valorem taxation welfare-dominates specific. The objective of this paper...

We study the matching patterns between heterogeneous principals and agents in a principal-agent model. The resulting equilibrium relationship between risk and incentives could be negative, positive or U-shaped. These results may provide an explanation for the absence of systematic empirical...