We show that establishing an internal labor market by offering combined contracts across hierarchy levels strictly dominates external recruitment when workers are homogeneous. The reason is that only an internal labor market can exploit higher tier rents for incentive provision on lower tiers....

We develop a model in which the principal and the agent share private information about the value of the agent for a multi-agent organization. The principal can disclose private information and make public the relative standing or status of all agents in the organization. We study whether it is...

We study the effect of leadership on incentive contracts in a moral-hazard framework. In our model, agents are allowed to choose the timing of their actions. The agents may choose their effort levels simultaneously or sequentially. We show that relative performance evaluation leads to a subgame...

Many argue that under- and over-reaction in asset prices are caused by inherently different factors. We design an asset market where information arrives sequentially over time to investigate the sources of these phenomena. We find that prices react insufficiently to news surprises and...

We study the cultural foundations of management practices, which are increasingly recognized as important determinants of firm performance. This research closes the loop on two developing literatures, one seeking cultural explanations for economic development and the other seeking to account for...

This paper begins by constructing a team-theoretical model of organizational adaptation and coordination with three distinct task coordination modes: vertical control, horizontal coordination, and hybrid coordination. The model is then used to provide fresh insights on complementarities...

Cultural traits play a significant role in the determination of economic outcomes and institutions. This paper presents evidence from laboratory experiments on the cultural integration of individuals of Chinese ethnicity in Australia, focusing on social preferences, risk attitudes, and...

Many of the most significant risks that people face in their lives are left-skewed, i.e., imply large losses with only small probability. I characterize skewness in binary risks, which are widely applied in both economic models and experiments. Moreover, I provide an explicit re-parametrization...

We assess whether public sector employees have a stronger inclination to serve others and are more risk averse than employees in the private sector. A unique feature of our study is that we use revealed rather than stated preferences data. Respondents of a large-scale survey were offered a...

This study investigates the extent to which gender differences in choosing to enter competitive tournaments are due to women's lower taste for competition or differences in confidence. We examine three types of confidence and find that confidence measured by expected ranking is the most...