We develop an organizational governance model with a single buyer and endogenous upstream entry. Investments and control rights over assets and actions are immediately contractable; production is contractable after uncertainty resolves. We show the following: Supplier competition eliminates...

In an experiment on the large language model GPT-4o, a supplier always makes a higher profit if it replaces uniform contract terms with a set of terms between which the customer may choose. The extra profit results from price discrimination. There is a first order and a second order effect. The...

Schelling (1956) first clarified how power to reduce one’s freedom of choice might benefit a bargaining party. A commitment to reject proposals, when successful, may force concessions from opponents who otherwise might have an upper hand. This paper experimentally studies credible commitments...

Migration brings strong economic benefits in the short term and even greater long-term benefits as it contributes to innovation, investment and economic dynamism. The costs of additional migrants are borne by communities that feel pressure on local services, while the benefits are spread more...

I consider an underexplored possible explainer of the "surprising" results of Ultimatum Game experiments, namely, that Proposers and Recipients consider following only some of all the logically possible strategies of their Ultimatum Game. I present an evolutionary analysis of different games...

This paper investigates the efficiency effects of governing vertical relationships by analyzing the incentives of firms to engage in exclusive contracts. In particular, the analysis focuses on the subcontracting context. When a downstream firm possesses a superior bargaining position, upstream...

Estimating intra-household sharing is crucial to understanding overall inequality. Standard measures of consumption inequality only take into account inequality between, and not within, households, because expenditure surveys are generally available only at the household level. I develop a new...

Conveying private information to interested parties is central to almost every economic and social activity. In such interactions, the sender may lie by misreporting the truth, but may also deceive by inducing inaccurate beliefs about the payoff-relevant state. While a huge experimental...

This paper shows that bargaining over tax payments is an important feature of tax compliance and enforcement in lower income countries. Analyzing the universe of administrative tax filings from Zambia, we document sharp bunching in (i) dominated regions above tax schedule discontinuities,...

Ransomware has become the most common cyber risk for businesses. The rise is not driven by attackers using innovative attacks, but instead by deteriorating negotiation outcomes. The average payment grew by almost 20,000% since 2018. However, it remains unclear why attackers can demand ever...

This paper explains brinkmanship with infinitely repeated veto bargaining games, where players have private information. In the basic model, the paper solves for two types of Perfect Bayesian Equilibria. First, in Risk-Taking Equilibria (RTE), the proposer is more risk-seeking and engages in...

We investigate how buyer-supplier communication affects procurement prices, comparing auctions without direct communication to negotiations allowing it. In controlled experiments involving students and procurement professionals, we find communication increases prices, disadvantaging buyers....

In many professional activities humans are getting better generation by generation. This is supposed to be the case, for instance, in sports and in science. Is it true in the arts? In this paper, we consider violinists from the time period in which audio and video recordings became possible....