Optimal debt contracts under costly enforcement

We consider a financing game where monitoring is costly, non-contractible and allowed to be stochastic. The optimal contract, which is debt, induces creditor leniency and strategic defaults on the equilibrium path, consistent with empirical evidence on repayment and monitoring behavior in credit markets. Our paper is the first where the optimal contract is debt and default is not synonymous with bankruptcy.     

New evidence on the fluctuations in ocean freight rates in the 1850s

Newly constructed global indices of ocean freight rates in the 1850s show large cyclical fluctuations in these years. A new type of freight rate index, referred to as a repeat sailings index, is presented, which is similar to a type of index frequently applied to house prices. An econometric model of the freight rate market is estimated on monthly data from the 1850s. It is found that harvest failures, business cycles, the supply of tonnage and the Crimean War all significantly affected freight rates in this period. The Crimean War may have accounted for about a quarter of the surge in freight rates in the years prior to the outbreak of the War; once the War broke out in March 1854, however, it was of less importance.     

Efficiency Wages and X-Inefficiencies

Within most organizations, agents may spend time on a variety of tasks — productive and redistributive. In this paper, I derive an optimal multi-task incentive scheme under the assumption that agents have limited liability. The wage level is shown to increase with an agent's discretion and the organization's profits. With multiple agents, it is generally not optimal for the principal to fully eliminate distributional conflict within the organization. The resulting influence costs constitute a measure of X-inefficiency. The analysis illuminates the relationship between competition and influence costs, emphasizing the role of the organization's production technology.     

Human resource center concept: The A.T.&T. experience

There were many lessons learned in this experiment; among them: that change efforts must be systemwide and must be directed at those problems which represent the greatest barriers to change. While this project failed, the authors find and spell out the conditions in which it could have been an adequate vehicle.     

The Effects of Culture and Structure on Strategic Flexibility during Business Model Innovation

This study uses responses from 107 multinational firms to reveal CEO perceptions of the drivers of strategic flexibility during business model innovation. While the positive effect of creative culture is confirmed, partner reliance reduces strategic flexibility during business model innovation. Further, structural change is disaggregated into efforts that either focus managerial attention on core activities or reconfigure existing activities. CEOs perceive that structural flexibility requires structural simplification while retaining control of non‐core functions. We find that the relative magnitude of business model innovation effort moderates the effect of reconfiguration on strategic flexibility. The implications for theories of organizational design and dynamic capabilities are discussed.     

Natural Resources Damage from Chernobyl: Further Results

This note reports the extent of somecomponents of natural resources damage from theChernobyl nuclear accident in 1986, primarily lossesin producer surplus in the reindeer industry inLapland, Sweden. The damage suffered by Swedish moosehunters has been estimated earlier. The result is alower boundary of natural resources damage amountingto SEK 736 million, or about SEK 112 per adultSwede.