Corruption is usually viewed as an impediment to investment and growth. However, China's experience suggests that the issue is probably more complex: In the past government officials would go out of their way to promote investment and development. But since the start of a far-reaching...

This paper develops a two-period labor market model with imperfect information and on-the-job training, and uses data from National Longitudinal Survey of Youth 1979 Cohorts (NLSY79) to test its predictions. We find that training does not explain the positive relationship between employer size...

We study a competitive labor market with imperfect information. In our basic model, the labor market consists of heterogeneous workers and ex ante identical firms who have only imperfect private information about workers' productivities. Firms compete by posting wages in order to cherry-pick...

We study a competitive labor market with imperfect information. In our basic model, the labor market consists of heterogeneous workers and ex ante identical firms who have only imperfect private information about workers' productivities. Firms compete by posting wages in order to cherry-pick...

It is well known that the presence of imperfect monitoring limits the possibility of making efficient agreements. When firms interact repeatedly in multiple markets, however, we show that noisy observations may improve the possibility of collusion. When observation is noisy in at least one...

Successful upstream collusion must satisfy both the incentive constraint (keeping cartel members in line) and the compensation constraint (preventing lawsuits from downstream firms). Our analysis shows that there is a non-monotonic and inverted U-shaped relationship between cartel incidence and...