This paper studies the problem of how to delegate the allocation of finite resources across multiple categories to an agent who has better information on their benefits. It focuses on a tractable, natural class of delegation policies that impose a floor or cap on the allocation to each category, a generalization of Holmström’s (1977) “interval controls” to multidimensional settings. The paper c...

This paper studies the macroeconomic implications of …rms’precautionary real investment behavior in response to the anticipation of future …nancing constraints. Firms increase their demand for liquid and safe but low-return investments in anticipation of future borrowing constraints in order to decrease the probability of having to forego future pro…table investment opportunities. I show in a c...

Based on previous structural and functional studies, a potential receptor-binding site composed of residues that form a pocket at one end of the two long antiparallel helices in the receptor-binding domain of Friend 57 murine leukemia virus envelope protein (RBD) has been proposed. To test this hypothesis, directed substitutions for residues in the pocket were introduced and consequences for in...

If workers have concerns for local status, it seems plausible that firms can increase their profits by exploiting the competitive nature of their employees. This paper shows, contrary to expectations, that firms may not be able to do that; in fact, firm profits are reduced by the workers’ choices of relative concerns. In doing so, this paper also offers an explanation for why agents might exhib...

This paper introduces private sender information in a game of Bayesian persuasion with monotonic sender preferences. I derive properties of increasing di¤erences related to the precision of signals and use these to characterize the set of equilibria selected by the D1 criterion. These equilibria are either separating (i.e., the sender’s choice of signal reveals his private information to the re...

This paper studies the intertemporal allocation of incentives in a repeated moral hazard model with reference-dependent preferences as in Kőszegi and Rabin (2009). Besides consumption utility, the agent experiences utility from the change in his beliefs about present and future effort and income. When effort plans are rational, the prospect of being disappointed by the outcome realization equal...

In many contractual relationships, consumers are allowed to terminate agreements at will. We study how removing commitment power from consumers affects equilibrium contracts and welfare when consumers have self-control problems. We show that removing commitment power is welfare improving when consumers are sufficiently dynamically inconsistent. Controlling for impatience, it is easier to sustai...

We develop a dynamic principal–agent model to show how imperfect public information and asymmetric beliefs, asymmetric risk attitudes, complementary actions by both parties, and inter-temporal adverse selection arising from the agent’s unobservable actions interact to affect optimal dynamic contracts. Our continuous-time formulation of the model, which features both “hidden actions” and “hidden...

This paper studies incentives in a dynamic contracting framework of a levered firm. In particular, the manager selects long-term and short-term efforts, while shareholders choose initially optimal leverage and ex-post optimal default policies. There are three results. First, shareholders trade off the benefits of short-termism (current cash flows) against the benefits of higher growth from long...

In this paper the design of a voluntary incentive scheme for the provision of ecosystem services is considered, having in mind the forested areas in developing countries where a governmental agency plans to introduce a set-aside policy. Payments are offered to the landowners to compensate the economic loss for not converting land to agriculture. The information asymmetry between the agency and ...