We study a team whose members choose a joint project and exert individual efforts to implement it. Members have private information about the productivities of alternative projects. We find conditions under which information fails to be shared and the most productive project fails to be selected. While the concealment of information can be efficient, the team’s incentive to conceal is inefficie...

Using micro evidence from manufacturing and services firms located in 55 African countries, this paper shows that better management practice, reflected by international management certification, helps firms to raise productivity. Larger and older firms and firms operating closer to the technological frontier are more likely to possess international management standards certification, as do firm...

This paper proposes a simple model for understanding transaction costs – their composition, size and policy implications. We distinguish between investments in institutions that facilitate exchange and the cost of conducting exchange itself. Institutional quality and market size are determined by the decisions of risk averse agents and conditions are discussed under which the efficient allocati...

We study what kind of equilibria of which mechanisms are ex post renegotiation-proof (EPRP), i.e., robust against the possibility of ex post renegotiation under a variety of renegotiation procedures, and which social choice functions are EPRP implementable. In complete information environments with two agents only budget balanced Groves allocations are EPRP implementable, while with three or mo...

We ask how to regulate pecuniary private benefit consumption. These benefits can compensate controlling shareholders for monitoring managers and investing effort in implementing projects. Controlling shareholders may consume excessive benefits, however. We argue (a) ex post judicial review of controlled transactions dominates ex ante restrictions on the controlled structures: the latter elimina...

We experimentally investigate information aggregation through majority voting when some voters are biased. In such situations, majority voting can have a “dark side,”that is, result in groups making choices inferior to those made by individuals acting alone. In line with theoretical predictions, information on the popularity of policy choices is beneficial when a minority of voters is biased, b...

We use laboratory experiments to test for one of the foundations of the rational voter paradigm —that voters respond to probabilities of being pivotal. We exploit a setup that entails stark theoretical effects of information concerning the preference distribution (as revealed through polls) on costly participation decisions. The data reveal several insights. First, voting propensity increases s...

We consider market rules for transferring IP addresses, numeric identifiers required by all computers connected to the Internet. Transfers usefully move resources from lowest to highest-valuation networks, but transfers tend to cause socially costly growth in the Internet’s routing table. We propose a market rule that avoids excessive trading and comes close to achieving social efficiency. We a...

We investigate the computational complexity of several decision problems in hedonic coalition formation games and demonstrate that attaining stability in such games remains NP-hard even when they are additive. Precisely, we prove that when either core stability or strict core stability is under consideration, the existence problem of a stable coalition structure is NP-hard in the strong sense. ...