Repeated games with transfers
When firms want to collude with other firms or ensure the performance of their suppliers and employees, they find it difficult to write a (complete) externally enforced contract and instead have to rely on self-enforcing agreements. Observing that in many of these relationships monetary transfers are possible, my coauthor Sebastian Kranz and I systematically analyze repeated games with transfers.
Agency problems and limited liability
Agency problems arise when ownership and control are separated. They occur for example when an investor funds a project of an entrepreneur with limited wealth or when shareholders delegate decision making to the managers of the firm. Contracts and legal regulation can be used to align the incentives of the agent with those of the principal. My research in this area is concerned with the following questions: Should manager liability be limited by a business judgment rule? What are optimal compensation agreements between facilities that create negative externalities and host communities, if communities have not enough funds to breach the contract in light of changed circumstances? Generally, what is the effect of limited liability in models with hidden information and with hidden action?
Incomplete contracts and renegotiation
Starting from the observation that contracts are often incomplete and will be renegotiated, how can the resulting hold-up problem be mitigated? My research considers the role of contract law, asymmetric information about outside options and repeated interactions as possible solutions.
Incentives in organizations
Processes within the firm are also often governed by incentive contracts and repeated interactions. My research addresses the following questions: For efficient relational incentive contracts, should production be organized in teams or in hierarchies? Is it possible to make sense of the management wisdom "A's hire A's and B's hire C's" in a simple game-theoretic model? How does an optimal mechanism to assign an unpleasant task look like when payments cannot be used?
Strategic reasoning and eye-tracking
This research is concerned with the question "How informative are gaze patterns about choices and to what extent are subjects able to exploit this information, and how does this depend on the strategic situation?".