• Publications
  • Influence
Property Rights and the Nature of the Firm
This paper provides a framework for addressing the question of when transactions should be carried out within a firm and when through the market. Following Grossman and Hart, we identify a firm with
Credit Cycles
We construct a model of a dynamic economy in which lenders cannot force borrowers to repay their debts unless the debts are secured. In such an economy, durable assets play a dual role: not only are
A Theory of Debt Based on the Inalienability of Human Capital
Consider an entrepreneur who needs to raise funds from an investor, but cannot commit not to withdraw his human capital from the project. The possibility of a default or quit puts an upper bound on
Incomplete Contracts and Renegotiation
When drawing up a contract, it is often impracticable to specify all the relevant contingencies, and so contracts are typically incomplete. This paper considers the extent to which these gaps migh t
Default and Renegotiation: A Dynamic Model of Debt
We analyze the role of debt in persuading an entrepreneur to pay out cash flows, rather than to divert them. In the first part of the paper we study the optimal debt contract -- specifically, the
Foundations of Incomplete Contracts
In the last few years, a new area has emerged in economic theory, which goes under the heading of 'incomplete contracting'. However, almost since its inception, the theory has been under attack for
Implementation and Renegotiation
The paper characterises the choice rules that can be implemented when agents are unable to commit themselves not to renegotiate the mechanism.
Subgame Perfect Implementation
This paper examines the use of stage mechanisms in implementation problems and provides a partial characterization of the set of subgam e perfect implementable choice rules. It is shown that, in many
Nash Implementation: A Full Characterization
The authors extend E. Maskin's results on Nash implementation. First, they establish a condition that is both necessary and sufficient for Nash implementability if there are three or more agents (the