We examine the effects of biased (conservative or liberal) reporting on product market competition. Cournot duopolists observe either firm-specific or industry-wide shocks and provide noisy reports subject to an exogenous mandated bias attributed to public policy. Given neutral prior beliefs,...

Manufacturers have recently begun outsourcing product assembly and completion tasks to their suppliers. Such outsourcing solves several contracting problems, but generates new incentive frictions between manufacturers and their suppliers. In this paper, we analyze a manufacturer's decision to...

Markets have a remarkable capacity for producing efficient resource allocations when information about relative values is dispersed across economic agents. We explore the use of market mechanisms inside the firm to address a resource allocation problem, and compare the outcome with the first-...

What prevents the spread of information among coworkers, and which management practices facilitate workplace knowledge flows? We conducted a field experiment in a sales company, addressing these questions with three active treatments. (1) Encouraging workers to talk about their sales techniques...

This paper shows that major components of modern manufacturing processes, such as inventory management and cross-training, play a significant control role. In our model, workers possess information that is critical to efficient ongoing operations. An organizational design that motivates workers...

Capital budgeting frequently involves multiple stages at which firms can continue or abandon ongoing projects. In this paper, we study a project requiring two stages of investment. Failure to fund Stage 1 of the investment precludes investment in Stage 2, whereas failure to fund Stage 2 results...

Managerial incentives influence risk-taking as well as effort. Theoretical research has long considered risk-taking to be a potential side effect of incentive pay, but empirical analysis of risk-taking incentives has been more limited. This paper uses exogenous variation in incentives to examine...

As incomes rise in the developing world and as governments and lending agencies invest in energy infrastructure, households are gaining access to commercial energy sources, such as electricity, natural gas and oil. Economists have noted for some time, however, that households do not consume...