This paper studies the relation between discrete-time and continuoustime principal-agent models. We derive the continuous-time model as a limit of discretetime models with ever shorter periods and show that optimal incentive schemes in the discrete-time models approximate the optimal incentive scheme in the continuous model, which is linear in accounts. Under the additional assumption that the ...

The end of the Cold War and the collapse of the USSR and Yugoslavia result in a proliferation of unrecognized and weak states, which continue to exist today. This article considers the relationship between unrecognized states and the major powers, Russia and the United States, by focusing on the foreign military bases or standing armies of the latter. In addition, unrecognized states, their par...

What roles do firms play in technological change? A new technique involves interests uch as profit and growth. It also involves new knowledge. Just as economic development for Joseph Schumpeter is a new combination of existing elements [1961, pp. 65-66], so technological change combines and develops existing knowledge. To learn what roles firms play in generating (or blocking) technical change,...

Industrial Disputes cause loss of productivity and decrease of profit, tending towards huge losses. It is, therefore, necessary to establish a benchmark level of tact or skill that is required to ensure the prevention of Industrial Disputes. The benchmark level could be an empirical formula, or a set of regulatory data, that would be required to be satisfied. The procedure to be followed requir...

This paper uses a tailor-made newly available data set for enterprises from manufacturing industries in Germany to investigate for the first time the links between export diversification over destination countries and goods on the one hand and the profitability of the exporting firms on the other hand. We find that profits tend to be larger in firms with less diversified export sales over goods...

Entrepreneurs who start new firms may choose not-for-profit status as a means of committing to soft incentives. Such incentives protect donors, volunteers, consumers and employees from ex post expropriation of profits by the entrepreneur. We derive conditions under which completely self-interested entrepreneurs opt for not-for-profit status, despite the fact that this status limits their abilit...

If returns on two assets share common volatility components, the prices of options on the assets should be interdependent and the implied volatility spread should mean revert. We first demonstrate, using the canonical correlation method, that there is a common component among the volatilities of the returns on S&P 100 and S&P 500 indexes. We then exploit this commonality by trading on the volat...