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Can You Buy Creativity in the Gig Economy?

It's possible, but creators need more of a stake. A study by Feng Zhu of 10,000 novels in the Chinese e-book market reveals how tying pay to performance can lead to new ideas.

Weak Credit Covenants

Prior to the 2020 pandemic, the leveraged loan market experienced an unprecedented boom, which came hand in hand with significant changes in contracting terms. This study presents large-sample evidence of what constitutes contractual weakness from the creditors’ perspective.

The Unexpected Way Whistleblowers Reduce Government Fraud

Even unfounded allegations by whistleblowers can force government contractors to renegotiate their terms, say Jonas Heese and Gerardo Perez Cavazos. Open for comment; 0 Comments.

Transaction Costs and the Duration of Contracts

When buyers transact with sellers, they select not only whom to transact with but also for how long. This paper develops a model of optimal contract duration arising from underlying supply costs and transaction costs. The model allows for the quantification of transaction costs, which are often unobserved, and the impact of these costs on welfare.

Internalizing Global Value Chains: A Firm-Level Analysis

Manufacturing activities that used to be performed in close proximity are increasingly fragmented across firms and countries. This paper provides strong evidence that considerations driven by contractual frictions critically shape firms' ownership decisions along their value chains.