I study the implications of exclusive contracts for smartphones. Theory models indicate that lower demand elasticities for handsets relative to wireless networks could lead to exclusive contracts maximizing joint profits of the contracting parties. I estimate smartphone and carrier demand on a detailed monthly market-level dataset of US consumer decisions over 2008-2010. Counterfactual simulati...

Explaining patterns of asset ownership is a central goal of both organizational economics and industrial organization. We develop a model of asset ownership in trucking, which we test by examining how the adoption of different classes of on-board computers (OBCs) between 1987 and 1997 in uenced whether shippers use their own trucks for hauls or contract with for-hire carriers. We Ž nd that OBC...

We show that when the researcher’s (observable but not contractible) contribution to innovation is crucial, a covenant not to compete (CNC) reduces effort and profits under both spot and relational contracts. Having no CNC allows the researcher to leave for a rival. This alleviates a commitment problem by forcing the firm to reward a successful researcher. However, if the firm’s R&D investment ...

This paper analyzes the investment timing for team projects. Under demand uncertainty, it is valuable to maintain flexibility in future investment alternatives. However, one party’s flexibility creates strategic uncertainty for another party, which causes the other party to choose a higher level of flexibility. This strategic complementarity leads to delays in investments in contrast to the cas...

We show that joint ownership (partnership or joint venture) can implement Þrst best in a twice repeated game when each agent believes that the other party is honest with a very small probability. In the Þnal period the ownership structure is renegotiated because joint ownership is ex post inefficient. If an agent has cheated her outside option is very low since by cheating she has lost her repu...

We show that when the researcher’s (observable but not contractible) contribution to innovation is crucial, a covenant not to compete (CNC) reduces effort and profits under both spot and relational contracts. Having no CNC allows the researcher to leave for a rival. This alleviates a commitment problem by forcing the firm to reward a successful researcher. However, if the firm’s R&D investment ...

Consider trade conducted via a platform, such as an online app store or a farmers market. The quality sellers choose for their products affects the surplus trade generates. Because the platform’s profit depends on that surplus, the platform can have an incentive to regulate quality. This is true even if quality is observable at time of purchase or if sellers can develop reputations concerning q...

The practice of resetting strike prices on underwater executive stock options has drawn criticism for weakening managerial incentives. Our model shows that although the anticipation of resetting can negatively a ect initial incentives, resetting can still be an important, value-enhancing aspect of compensation contracts, even from an ex-ante standpoint. In fact, we nd that some resetting is alm...

The largest decile of commercial electricity customers comprises half of commercial sector electricity usage. We quantify a substantial split incentives problem that exists when these large rms are on electricity-included property lease contracts. Using exogenous variation in weather shocks, we show that customers on tenant-paid contracts use 6-14% less electricity in summer months. The policy ...