Theofanis Tsoulouhas

Theofanis Tsoulouhas
University of California, Merced | UCM · Department of Management

Ph.D., M.S., B.S.

About

31
Publications
1,855
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494
Citations

Publications

Publications (31)
Article
How should sovereign bailouts take account of the effects bailouts have on policy reforms? Conflicted recipient governments complicate bailout choices because some reforms that spur growth reduce rents that benefit government decision makers. Our model takes account of whether bailout generosity and policy reforms are strategic substitutes, strateg...
Article
The paper differs from current literature by providing a systematic analysis of the relationship between sovereign debt, financial distress and political career concerns via a novel game-theoretic model, in order to analyze the strategic behavior of governments in revealing financial distress and requesting a rescue program from international organ...
Article
This paper provides a solution to a puzzle in the analysis of tournaments, that of why there is no agent discrimination or differential contracting in certain business practice settings. The paper examines the problem of a principal contracting with multiple agents whose activities are subject to common shocks. The presence of common shocks invites...
Chapter
A feasible allocation is Pareto optimal if there is no other feasible allocation that makes at least one of the agents in an economy strictly better off without making someone else worse off.
Article
This paper fills in a gap in the tournament literature by developing a framework that can be used to analyze both cardinal and ordinal tournaments, as well as piece rates. The analysis aims to obtain a Pareto ranking of cardinal versus ordinal tournaments, which is an open question in the literature. The analysis shows that, surprisingly, cardinal...
Article
The papers in this special issue represent several of the directions taken by current research on tournaments and contests. Two surveys provide useful insight into promotion contests and into contest functions. Other papers analyze the implications of limited liability, incomplete information, cross-shareholding, and non-binding side payments. And...
Article
This paper provides a solution to a puzzle in the analysis of tournaments, that of why there is no agent discrimination in practice. The paper examines the problem of a principal contracting with multiple agents whose activities are subject to common shocks, when there is moral hazard and adverse selection. The presence of common shocks invites the...
Article
In this paper, we construct a North-South general equilibrium model of offshoring, highlighting the nexus among effort-based labor productivity, heterogeneous offshoring costs and the structure of wages. Offshoring is modeled as international transfer of management practices and production techniques that allow Northern firms to design and implemen...
Article
Full-text available
A celebrated result in the theory of tournaments is that relative performance evaluation (tournaments) is a superior compensation method to absolute performance evaluation (piece rate contracts) when the agents are risk-averse, the principal is risk-neutral or less risk-averse than the agents and production is subject to common shocks that are larg...
Article
"The papers in this symposium reflect several of the directions taken by current research on tournaments, contests and relative performance evaluation. The papers help us understand the implications of agent heterogeneity on the incentives of agents to perform or self-select the offers designed for them. They encompass various issues such as career...
Article
Full-text available
This paper proposes an alternative to standard cardinal tournaments. The analysis contrasts "hybrid" cardinal tournaments to standard cardinal tournaments and piece rates. It shows that providing for partial insurance against common uncertainty via a hybrid tournament (in which the weights on absolute and group average performances are not equal) i...
Article
Full-text available
This paper develops a novel model of agent behavior in organizations in order to compare the efficiency of “open” versus “closed” organizations. Closed organizations “screen” potential agents before admitting them while open organizations do not. Both have the option to “sort” (audit) individual behavior after observing aggregate outcome. Each agen...
Article
This paper compares relative performance evaluation via tournaments to absolute performance evaluation via piece rates when agents are heterogeneous ex post, to make the point that agent heterogeneity compromises the insurance function of tournaments. In particular, we show that the more heterogeneous agents are the less insurance can be offered th...
Article
Full-text available
Should a firm favor insiders (handicap outsiders) when selecting a CEO? One reason to do so is to take advantage of the contest to become CEO as a device for providing current incentives to employees. An important reason not to do so is that this can reduce the ability of future CEOs and, hence, future profits. The trade-off between providing curre...
Article
We argue that outsiders are handicapped (chosen only if markedly better than the best insider) in Chief Executive Officer (CEO) successions to strengthen the incentive that the contest to become CEO provides inside candidates. Handicapping implies are that a firm will be more likely to choose an insider to succeed to the CEO position where insiders...
Article
A highly acclaimed result in contract theory is that tournaments are superior to piece rate contracts when the agents are risk averse and their production activities are subject to a relatively large common shock. The reason is that tournaments allow the principal to trade insurance for lower income to the agents. Our analysis shows that this celeb...
Article
Grower discontent with tournaments as mechanisms for settling poultry contracts can largely be attributed to the group composition risk that tournaments impose on growers. This article focuses on the welfare effects of a widely advocated regulatory proposal to prevent integrator companies from using tournaments and replace them with schemes that co...
Article
Firms tend to promote insiders to the CEO position rather than to hire outsiders. This paper explains this phenomenon by developing a framework in which firms value the incentive that the contest to become CEO provides to current employees, but also want the most able candidate (insider or outsider) to become CEO. We determine the optimal payment t...
Article
We show that precontractual gathering of information by the uninformed party in a transaction benefits the favorable types of the informed party by allowing them to separate from the unfavorable types. Complete separation of types can only occur if the informed party is able to revise her initial contract offer when the uninformed party detects an...
Article
Using a data set containing more than 1,000 observations on CEO succession in large U.S. firms over the period 1974-1995, we examine empirically the choice between insiders and outsiders as CEO. We employ a theoretical framework in which firms value both the incentive that the contest to become CEO provides to insiders and the choice of a more able...
Article
The paper analyzes the optimality of relative performance evaluation via two-part piece rate tournaments in incentive contracting with multiple agents and two-sided moral hazard. If the agents are risk-averse, it is shown that a tournament is optimal only when the following conditions hold: (i) there is common uncertainty inflicted on the activitie...
Article
We examine the strategic role of information transmission in a repeated principal-agent relationship where the agent produces information that is useful to the principal. The agent values continuous employment for the principal because he makes a relationship-specific investment that can yield rents to him when the relationship is renewed. Assuming...
Article
Full-text available
This article analyzes optimal livestock production contracts between an integrator company and many independent growers in three similar industries: broiler, turkey, and swine. The analysis provides an explanation for the simultaneous existence of distinct incentive schemes in these industries by examining the effects of bankruptcy. The key factors...
Article
This paper investigates the interaction between a privately informed firms contracts for labour and its contracts for credit. The analysis shows that if the worker has no ex post outside opportunities, or if the liquidation value of the firm is large, then the credit contract can always be state-independent: if the worker has outside opportunities...
Article
This paper investigates the interaction between a firm's contracts for labor and its contracts for credit under asymmetric information and limited liability, when workers are either always committed to their contract or they lack the power to commit ex post because arbitrage opportunities are available to them. The analysis contains two main result...
Article
In this paper we investigate the quantitative relation between population, real wages and urbanization in the Italian economy during the period 1320-1870. In this period the prevailing conditions were those of a poor, mainly agricultural economy with limited human capital and rudimentary technology. However, these centuries witnessed the considerab...

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