Many countries regulate the quality of food and drugs, yet it remains unclear whether markets can be relied upon to deliver high quality in the absence of regulation, notably where companies can advertise the superior quality of their products. We present evidence from two field experiments in...

Property rights over knowledge and its output--intellectual property rights--are often weak. We treat the strength of property rights as a primitive of the environment. We examine the effects of the strengths of these rights on the structure of contracts and relationships employed by firms in...

We study the effect of globalization on the stock of trust in organizations. We present a simple model of endogenous trust and show that contrary to centralized hierarchies (pure limited liability firms), decentralized organizational structures (cooperatives) foster the emergence of trust. We...