Research

I study how relational contracts manage uncertainty through information design in a frictional matching market. A principal and an agent form a match of unknown quality, and the principal chooses how much evidence to acquire before deciding whether to continue the relationship and pay an informal bonus. More precise learning improves separation from poor matches but can weaken the credibility of future rewards for retained agents. The optimal information policy is binary, and above a belief cutoff the principal remains strategically ignorant even when information is free. Market thickness determines how much learning the relationship can sustain. Scarce principals induce full revelation, abundant principals shut learning down, and intermediate markets generate partial learning. The decentralized economy can therefore over- or under-learn relative to a constrained planner.

Managers often report that labor constraints, defined as the inability to find workers, are a major obstacle to firm growth. In this paper, we analyze why firms report these constraints rather than preempt them by increasing wages. Using German vacancy and establishment data, we document that labor constraints reflect real recruiting difficulties and are related to firms’ growth and profitability. Consistent with basic monopsony models, firms that report labor constraints pay lower wages, and a quasi-exogenous increase in wages alleviates the constraints. However, because standard frictions alone cannot match wage dynamics at constrained firms, we build a dynamic matching model with incomplete information about the state of the economy and downward wage rigidity. Consistent with the model, hiring difficulties are most prevalent for peripheral occupations, arise in markets where wages are harder to track — whether due to high wage dispersion or wage shocks in other sectors — and are more likely at firms with high wage rigidity. The evidence is consistent with a key role for firms’ inaccurate beliefs and gradual learning about workers’ outside options in different states of the economy.

When organizations merge workers from different backgrounds, they often invest in cultural integration to reduce frictions and disagreements. I study when such integration improves organizational performance in a model where workers value both accuracy on an uncertain task and coordination with one another. I distinguish two forms of integration. Belief-based integration makes groups’ initial views more similar, while information-based integration gives workers better task-relevant signals. By changing what each worker expects others to think and do, belief-based integration affects higher-order beliefs. It can reduce visible disagreement but lower welfare when initial views are uninformative, because coordination leads workers to place greater weight on those views. Better information instead shifts behavior toward evidence and usually raises welfare. These results imply that organizational cohesion can be a poor proxy for decision quality, especially when coordination motives are strong.

The allocation of decision rights shapes both realized outcomes and the attribution of responsibility, creating a motive to delegate in order to shift responsibility. I study this motive in a career-concerns model where a manager privately knows her ability and decides whether to retain decision rights over a project or delegate them to a subordinate. Because retaining the project ties her career to her own performance, whereas delegating ties it to the average ability of managers who delegate, weak managers give away some projects they should keep, while able managers keep some they should delegate. I characterize when both distortions arise and how organizational evaluation and review rules may help prevent the distortions. 

Organizations often collect information through standardized reports that certify facts but may overlap. Masquerading occurs when an agent can truthfully file a coarse report to avoid the consequences attached to a more specific one. I study how an organization designs its internal transparency by choosing which reports remain available and how each is scored. I characterize implementability using a weighted graph of deviation gains and show that even unused reports can consume limited score capacity. For mutually exclusive hierarchical reporting systems, I compute the optimal classification, report menu, and scores in polynomial time. Mandatory coarse reports can force pooling and reduce transparency. Greater score capacity raises welfare but need not produce finer reporting.

Does competition from multinational employers crowd out domestic investment in skills? Existing theory work suggests that it does, because portable skills make workers vulnerable to poaching. Using South African administrative tax data linking workers to firms, we show instead that multinational growth reshapes where training takes place. Large domestic firms establish certified training programs, sustain them over time, raise wages to retain their most productive workers, and hire further down the ability distribution. Small firms, by contrast, raise wages to attract able workers but reduce their investment in training. We explain this divergence with a make-or-buy model: training entails a fixed setup cost that firms hiring at scale can justify, whereas smaller firms increasingly acquire skills through the labor market. Competition for skilled workers therefore reallocates training across firms rather than eliminating it. This mechanism also highlights the limited effectiveness of per-trainee subsidies.

This paper studies how career incentives shape job search and early career choices among young workers in India. We focus on whether entry-level workers value promotion opportunities and future wage growth, and whether these preferences affect how they respond to job postings. Using a discrete choice experiment with young adults in India, we estimate willingness to pay for jobs that provide clearer paths to promotion and higher future earnings. Pilot results show that respondents are willing to give up current wages for advertised promotion opportunities, with valuations increasing when promotion probabilities are higher. Workers also value future wage growth, especially when it is linked to a salient promotion path. These findings suggest that career incentives are an important but under-measured job attribute in youth labor markets.