In this paper we reply to Binmore and Shaked’s criticism of the Fehr-Schmidt model of inequity aversion. We put the theory and their arguments into perspective and show that their criticism is not substantiated. Finally, we briefly comment on the main challenges for future research on...

Lujo Brentano (1844-1931) hat sich als "realistischen" Ökonomen verstanden. Im Bereich der Arbeitsmarkttheorie sind zwei Bereiche von besonderem Interesse: Seine Untersuchungen über den Zusammenhang zwischen Lohn, Arbeitszeit und Arbeitsleistung und seine Überlegungen zur Bildung von...

In this paper we give an overview, with special emphasis on Germany, of the recent development of the market for venture capital. We analyse the financial contracting problems that arise when entrepreneurs need capital from outside investors, and demonstrate how these problems are addressed by...

Aus neoklassischer Sicht bestimmen sich Löhne und Zinsen (und damit die funktionelle Einkommensverteilung) so, daß eine richtige Wahl der Pruktionsverfahren induziert wird. In neokeynesianischer Sicht bilden sich Löhne und Zinsen (und damit die funktionelle Einkommensverteilung) so, daß der...

High-performance work systems give workers more discretion, thereby increasing effort productivity but also shirking opportunities. We show experimentally that screening for work attitude and labor market competition are causal determinants of the viability of high-performance work systems, and...

Contingent ownership structures are prevalent in joint ventures. We offer an explanation based on the investment incentives provided by such an arrangement. We consider a holdup problem in which two parties make relationship-specific investments sequentially to generate a joint surplus in the...

We propose a theory of ex post inefficient renegotiation that is based on loss aversion. When two parties write a long-term contract that has to be renegotiated after the realization of the state of the world, they take the initial contract as a reference point to which they compare gains and...