We model takeovers as a bargaining process and explain the existence and net effect of target as well as bidder termination fees, subject to bargaining power and outside options. In equilibrium, net termination fees (target minus acquirer fees) are offered by firms with a superior bargaining...

This paper argues that recent trends in the global economy have led to a shift in developed countries’ comparative advantage from mature industrial to early stage entrepreneurial production. We develop a three stage product life cycle model in which we distinguish between life cycle...

This paper analyses the relation between public pensions, fertility and child care in a closed economy OLG-model with endogenous fertility. It it shown that it is optimal to introduce child allowances if the government redistributes income from the young to the old, and rises when longevity...

In this paper we introduce an alternative version of the trust game by Dasgupta (1988) and Kreps (1990) that allows for asymmetric information. We use this version to study the effect of checking on the trustee’s behaviour, checking is a control option the trustor can decide to use and...

We study the relation between formal incentives and social exchange in organizations where employees work for several managers and reciprocate to a manager's attention with higher effort. To this end, we develop a common agency model with two-sided moral hazard. We show that when effort is...

We study the implications of rational inattention for individual price dynamics. Analyzing scanner data that cover 29 product categories over a eight-year period from a large Mid-western supermarket chain, we uncover a surprising regularity in the data--small price increases occur more...

Individuals are increasingly put in charge of their financial security after retirement. Moreover, the supply of complex financial products has increased considerably over the years. However, we still have little or no information about whether individuals have the financial knowledge and skills...

Richard Florida stated that it is not (only) job opportunities or urban amenities which attract creative high-educated people to cities but, rather, tolerance and aesthetics. We have tested this hypothesis in a cross section of Dutch cities. Our conclusion is that the tolerance/creative class...

One of the most important potential benefits from the process of international financial integration is the opportunity it offers for diversification of macroeconomic risks internationally. In turn, the cross- border diversification of portfolio holdings is widely considered to be the major...

Abstract The aim of this paper is to explain, with the aid of institutional economic theories, why Dutch works councils may contribute to an efficient governance structure. To this end, in this study a sketch will be given of the existing structure, in which the particular Dutch two-tier system...