Fixed cost: Includes all costs that do not vary with activity for an accounting period. Fixed costs are, at any time, the inevitable costs that must be paid regardless of the level of output and of the resources used. A Fixed Cost is therefore not an Opportunity Cost. Overhead is considered a fixed cost, even though it may vary somewhat according to the amount of activity. Any cost that does no...

We study a repeated principal-agent interaction, in which the principal offers a "spot" wage contract at every period, and the agent’s outside option follows a Markov process with  shocks. If the agent rejects an offer, the two parties are permanently separated. At any period during the relationship, the agent is productive if and only if his wage does not fall below a "reference point" (b...

This article studies the evolution of housing rents in St. Petersburg between 1880 and 1917 covering an eventful period Russian world history. We collect digitize over 5,000 rental advertisements from historic newspapers, which we use together with geo-coded addresses detailed structural characteristics to construct a quality-adjusted rent price index continuous time. provide first pre-war pre...

We consider which factors determined the price–rent ratio for the housing market in 18 U. S. metropolitan statistical areas (MSAs) and at the national level over the period of 1975– 2014. Based on a present-value framework, our proposed empirical model separates the price–rent ratio for a given market into unobserved components related to the expected real rent growth and the expected housing r...

Rent-Sharing, Hold-up, and Wages: Evidence from Matched Panel Data It is widely believed that rent-sharing reduces the incentives for investment when long term contracts are infeasible because some of the returns to sunk capital are captured by workers. We propose a simple test for the degree of hold-up based on the fraction of capital costs that are deducted from the quasi-rent that determines...

Firm Size, Economic Situation and Influence Activities This paper discusses the optimal firm size in the presence of influence activities, and the level of individual rent-seeking dependent on the economic situation of the firm. Since firm size has a discouraging effect on the level of individual rent-seeking but also a quantity effect as the number of rent-seekers increases, the interplay of b...

We study the benefits of private entrepreneurs entering into politics in China. Using original hand-collected data on political participation of entrepreneurs that control listed firms, we document evidence of rent seeking through their political networks and several potential channels through which rent seeking is realized. It is shown that political participation results in increased stock pe...