This thesis consists of three self-contained essays dealing with different aspects of macroeconomics and political Economy. The Relative Price of Investment Goods and Sectoral Contract Dependence I develop a quantitative model to explain the relationship between TFPs at the aggregate and sector levels and contracting institutions across countries. The incomplete contract enforcement induces distortions in the production process which come from the “hold up” problem between a final goods firm and its suppliers. Because investment goods sector is more contract dependent, its productivity suffers more from the distortion. In turn, countries endowed with weaker contract enforcement institutions face higher relative prices of investment goods. A Ricardian Model of the Labor Market with Directed Search I analyze how search friction affects the allocation in a Ricardian model of the labor market. The equilibrium shows that the matching pattern is partially mixed: Some tasks are only performed by skilled workers; some are only performed by unskilled workers; the remaining tasks are performed by both skilled and unskilled workers. The mixed matching pattern implies a mismatch in equilibrium. It turns out that the reason for the mismatch has its roots in search friction. In addition, I show labor market institutions have interesting implications for the unemployment rate and mismatch. A Dynamic Analysis of the Free-rider Problem I argue that special interest groups overcome their free-rider problem thanks to distorted government policy. As policy confers monopoly privileges on a group, it can also preserve and promote group’s organization. The key to sustaining the organization of the group is a dynamic incentive: when distorted policy generates rents for a group, each member of the group wish to make contributions not just to raise their rents today; they want to sustain their cooperation so that they will be able to influence policy in the future.

In group work, the sucker-effect is a motivational loss in which effort is reduced due to feeling taken advantage of when other group members intentionally avoid work, known as free-riding. No previous studies on the sucker-effect have investigated moderating factors that can be attributed to the free-rider. The purpose of this study was to explore if agreeable behavior of a free-rider would moderate the sucker-effect, and if so, to what extent. Using an experimental design, students (n = 20) at Södertörn University served as participants. A systematic allocation toone of two conditions was used, the less agreeable and more agreeable. During the experiment a participant and a confederate worked in dyadson a disjunctive cooperative jigsaw puzzle task. The manipulation was the free-riding confederate's level of agreeableness. Self-rated effort andactual performance were measured. Using Mann-Whitney U-tests (α =.05, two-tailed), no significant differences were found in either of thedependent variables. In fact, by and large, no sucker-effect was observed at all. Other than manipulating the confederate's level of agreeableness, the design allowed for much more interaction in the dyads than previous studies on the sucker-effect have. It is discussed whether this interaction might have created an ingroup feeling, leading to the prevention of asucker-effect. In this study it thus seems that the free-rider's level of agreeableness does not moderate the sucker-effect. Also, meaningful interaction between group members might prevent a sucker-effect fromoccurring at all. However, due to the study's small sample size, theseresults are not definitive and should be taken with caution.

有關市場經濟的文獻早已汗牛充棟，相較之下，組織經濟是一個較受 到忽視與待開發的領域。本文以三個模型來探討經濟組織的形成及組織與 市場的差異。在第一個模型中，我們承續Olson(1965)、Alchian and Dem- sets(1972)和Kandel and Lazear(1992)的理論，說明在聯合生產中 ，不同機制克服搭便車行為的效果，我們比教了三種理想型的機制：市場 （價格機能）、道德（同儕壓力）和層級組織，藉以說明組織的利益。在 第二個模型中，吾人藉由一個賽局模型比較了不同生產方式對形成雇傭關 係的影響，說明在單期和多期模型中，自營生產和聯合生產對雇傭關係的形成有何不同的影響。在第三個模型中我們探討了組織與市場究竟有何「本質」上的差異。首先吾人定義兩種不同的系統：集中的與分散的資訊系統。前者係以Simon (1967)的階層分解原則來定義經濟組織的資訊特色，後者則較接近無組織或是「市場」經濟體系。然後我們藉由模型的比較表明組織與市場在資訊上的差異。吾人的模型可視為對Hayek(1945)、Coase(1937)以及Sah and Stiglitz(1986)關於組織與市場結論的補充與註解。我們並將結論的一個引申與Lawrence and Lorsch(1967)關於組織與環境關係的結論加以比較：在我們的模型中，Lawrence andLorsch(1967)的結論只是環境景氣平均數大於零的一個特例。不過這仍是一個有待進一步驗證的結論。

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Market Liquidity, Active Investment, and Markets for Information. This paper studies a financial market in which investors choose among investment strategies that exploit information about different fundamentals. On the one hand, the presence of other informed investors generates illiquidity. On the other hand, investors who use different strategies can serve as quasi-noise traders for each other, thereby also supplying each other with liquidity. Thus, investment strategies can be substitutes or complements. Such externalities in information acquisition have effects on investor herding, comovement in prices and liquidity across assets, trade volume, and the informational role of prices. They further affect the relationship between financial markets and information markets. Information market competition fosters investor diversity, whereas monopoly power promotes investor herding. Also, in order to benefit from quasi-noise trading, a financial institution may engage in both proprietary trading and information sales. Security-Voting Structure and Bidder Screening. This paper shows that non-voting shares can promote takeovers. When the bidder has private information, shareholders may refuse to tender because they suspect to sell at an ex-post unfavourable price. The ensuing friction in the sale of cash flow rights can prevent an efficient sale of control. Separating cash flow and voting rights mitigates this externality, thereby facilitating takeovers. In fact, the fraction of non-voting shares can be used to discriminate between efficient and inefficient bidders. The optimal fraction decreases with managerial ability, implying an inverse relationship between firm value and non-voting shares. As non-voting shares increase control contestability, share reunification programs entrench managers of widely held firms, whereas dual-class recapitalizations can increase shareholder wealth. Signaling in Tender Offer Games. This paper examines whether a bidder can use the terms of the tender offer to signal the post-takeover security benefits to the shareholders of a widely held target firm. As atomistic shareholders extract all the gains in security benefits, signaling equilibria are subject to a constraint that is absent from bilateral trade models. The buyer (bidder) must enjoy gains from trade that are excluded from bargaining (private benefits), but can nonetheless be relinquished and enable shareholders to draw inference about the security benefits. Restricted bids and cash-equity offers do not satisfy these requirements. Dilution, debt financing, probabilistic takeover outcomes and toeholds are all viable signals because they make bidder gains depend on the security benefits in a predictable manner. In all the signaling equilibria, lower-valued types must forgo a larger fraction of their private benefits and these signaling costs prevent some takeovers. When the bidder has additional private information about the private benefits as in the case of two-dimensional bidder types, fully revealing equilibria cease to exist. This does not hold once bidders can offer not only cash or equity but also (more) elaborate contingent claims. Offers which include options avoid inefficiencies and implement the symmetric information outcome. Goldrush Dynamics of Private Equity. This paper presents a simple dynamic model of entry and exit in a private equity market with heterogeneous private equity firms, a depletable stock of target companies, and rational learning about investment profitability. The predictions of the model match a number of stylized facts: Aggregate fund activity follows waves with endogenous transitions from boom to bust. Supply and demand in the private equity market are inelastic, and the supply comoves with investment valuations. High industry performance precedes high entry, which in turn precedes low industry performance. There are persistent differences in fund performance across private equity firms, first-time funds underperform the industry, and first-time funds raised in booms are unlikely to be succeeded by a follow-on fund. Fund performance and fund size are positively correlated across firms, but negatively correlated across consecutive funds of a private equity firm. Finally, booms can make ”too much capital chase too few deals.” Reputable Friends as Watchdogs: Social Ties and Governance. To examine how governance is affected when a designated supervisor befriends the person to be supervised, this paper embeds a delegated monitoring problem in a social structure: the supervisor and the agent are friends, and the supervisor desires to be socially recognized for having integrity. Strengthening the friendship weakens the supervisor’s monitoring incentives, forging an alliance against the principal (bonding). But the agent also grows more reluctant to put the supervisor’s perceived integrity at risk, thus becoming more aligned with the principal (bridging). If the supervisor’s desire for social recognition is strong, the principal’s preferences regarding the supervisor-agent friendship are bipolar. Weak friendship makes the supervisor monitor intensively to save face. Strong friendship leads the supervisor to abandon monitoring but the agent to behave well in order to protect the supervisor from losing face. The strength of friendship necessary for the latter outcome decreases in the supervisor’s desire for esteem; that is, image concerns leverage the bridging effect of friendship. This suggests that overlapping personal and professional ties can enhance delegated governance in cultures or contexts where social recognition is important, and provides a novel perspective on issues related to crony capitalism, corporate governance, and organizational culture. / Diss. Stockholm : Handelshögskolan, 2009 Sammanfattning jämte 5 uppsatser