We analyze a competitive labor market in which workers signal their productivities through education à la Spence (1973), and firms have the option of auditing to learn workers’ productivities. Audits are costly and non–contractible. We characterize the trade–offs between signaling by...

We analyze the optimal allocation of authority in an organization whose members have conflicting preferences. One party has decision-relevant private information, and the party who obtains authority decides in a self-interested way. As a novel element in the literature on decision rights, we...

This paper considers price competition in a duopoly with quality uncertainty. The established firm (the `incumbent') offers a quality that is publicly known; the other firm (the `entrant') offers a new good whose quality is not known by some consumers. The incumbent is fully informed about the...

This paper studies a principal-agent relation in which the principal's private information about the agent's effort choice is more accurate than a noisy public performance measure. For some contingencies the optimal contract has to specify ex post inefficiencies in the form of inefficient...

We consider social contracts for resolving conflicts between two agents who are uncertain about each other's fighting potential. Applications include international conflict, litigation, and elections. Even though only a peaceful agreement avoids a loss of resources, if this loss is small enough,...

Die Industrieökonomik beschäftigt sich mit der Interaktion zwischen Markt und Unternehmen. Dies betrifft z.B. die Preis- und Produktwahl eines Unternehmens, das Wettbewerbsverhalten im Oligopol, Kartellabsprachen, Marktzutritts- und -austrittsentscheidungen sowie Forschungs- und...

Einführung und Grundlagen -- Das Marktverhalten des Monopols -- Oligopolistischer Wettbewerb -- Wettbewerbsbeschränkungen -- Forschung und Entwicklung -- Anhang A: Spieltheoretische Grundlagen -- Anhang B: Lösungen der Übungsaufgaben.Einführung und Grundlagen -- Das Marktverhalten des...

We investigate the welfare effect of increasing competition in an anonymous two-sided matching market, where matched pairs play an infinitely repeated Prisoner's Dilemma. Higher matching efficiency is usually considered detrimental as it creates stronger incentives for defection. We point out,...