This paper starts by discussing some nonstandard issues in organization theory: bou nded rationality; incomplete contracting; and collusive behavior, on which the rest of the paper focuses. It then contrasts the comprehens ive contracting and game theoretic approaches to collusion, and it li sts...

We examine the performance attributes of a merchant transmission investment framework that relies on 'market driven' investment to increase transmission network capacity needed to support competitive wholesale markets for electricity. Under a stringent set of assumptions, the merchant investment...

The paper provides a first analysis of market jump starting and its two-way interaction between mechanism design and participation constraints. The government optimally overpays for the legacy assets and cleans up the market of its weakest assets, through a mixture of buybacks and equity...

The article shows that time-consistent, imperfectly targeted support to distressed institutions makes private leverage choices strategic complements. When everyone engages in maturity mismatch, authorities have little choice but intervening, creating both current and deferred (sowing the seeds...

This paper analyzes how private decisions and public policies are shaped by personal and societal preferences ("values"), material or other explicit incentives ("laws") and social sanctions or rewards ("norms"). It first examines how honor, stigma and social norms arise from individuals'...