This article discusses the ability of an agent and a principal to achieve the first-best outcome when the agent invests in an asset that has greater value if owned by the principal than by the agent. When contracts can be renegotiated, a well-known danger is that the principal can hold up the...

The authors explore the interactions among firms with increasing returns regulated to break even by pricing with two-part tariffs. They provide conditions for existence and for efficiency of general equilibria with n firms. This involves finding hookup fees that are voluntarily paid and cover...

Several recent papers argue that price-matching policies raise equilibrium prices. The authors add to this literature by considering potential welfare losses, which have two sources: Harberger triangles from high prices and Posner rectangles from overentry. They compare price-matching markets...

Why don't people give more to charity? One reason is that the problems will be there whether individuals give or not. Here is a policy - inspired by the matching grants that charities use so effectively - that could actually make a real difference.

Abstract: Why don't people give more to charity? One reason is that the problems will be there whether individuals give or not. Here is a policy-inspired by the matching grants that charities use so effectively- that could actually make a real difference.

In bilateral trading problems, the parties may be hesitant to make relationship-specific investments without adequate contractual protection. The authors postulate that the parties can sign noncontingent contracts prior to investing and can freely renegotiate them after information about the...