Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in TRANSFERS TO FAMILIES WITH CHILDREN AS A PRINCIPAL-AGENT PROBLEM AbstractThe relationship between government and parents is modelled as a principalagent problem, with the former in the role of principal and the latter in the role of agents. We make three major points. The first is that, if the well-being of the child depends not only on luck, but also on parental actions that the government cannot readily observe, the latter can influence parental behaviour indirectly, by conditioning transfers on performance. The second point is that, if there are market inputs into the making of a happy or successful child, which the government can observe, but cannot ascribe to any particular parent or child because they are bought anonymously, an income transfer policy can be usefully complemented by an indirect tax policy that systematically distorts prices in favour of these inputs. The third is that, if parents care about their children, insurance and incentive considerations must be tempered by the need to compensate parents who have the misfortune of getting a child with low ability or, more generally, less well equipped to make the most of life. Ways of making these findings operative are discussed in some detail.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Student loans, even income-contingent ones, are not optimal. Potential university students with the appropriate characteristics should be offered a scholarship, dependent on both need and merit. The award of the scholarship should be conditional on the choice of university degree, but students with a natural aptitude for studies that do not hold the prospect of a well paid job should not be pushed towards potentially more lucrative ones. The scheme should be financed by a graduate tax that re-distributes from the better paid to the academically more successful. Terms of use: Documents in EconStor mayJEL Code: D82, I28.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We demonstrate that the notion of a "family constitution" (self-enforcing, renegotiation-proof family norm) requiring adults to provide attention for elderly parents carries over from a world where sexually indifferentiated individuals reproduce by cell separation, to one where individuals differentiated by sex marry, have children and bargain over the allocation of domestic resources on condition that individual preferences are transmitted from parents to children, and having the same preferences is a criterion for marrying. We also show that policies are generally nonneutral (even if the individuals concerned are altruistically linked to one another) and affect the share of the adult population that are governed by family constitutions. Terms of use: Documents inJEL-Codes: D100, I200, I300, J100.

We analyze the interactions between internal and external control mechanisms in a framework in which the board selects the CEO and then decides whether to retain or dismiss him after observing a signal regarding his ability. The novel aspect of our paper is that we consider both the hiring and the firing of the CEO by the board. The type of board is defined by its ability to select a good CEO, so that the quality of the CEO depends on the type of board. Then, the dismissal-retention decision provides information not only on the quality of the CEO but also on the board's type. We show that the board's behavior depends on the pressure from the takeover market and on whether its type is publicly known. When the pressure from the takeover market is high and the type of board is private information, the board prefers not to dismiss the manager even if it has received a very low signal regarding his quality. Hence, our model endogenously derives a collusion between board and CEO in which the board does not fire a bad CEO. This behavior emerges as an attempt to hide the board's inability to accomplish the first task, CEO selection, by distorting the second task, the CEO retention-dismissal decision.We are grateful to a coeditor and two referees and to Bruno Parigi for suggestions that greatly improved the paper. We would like to thank audiences at the EARIE Meeting in Lausanne, the Third Graz-Udine Workshop in Economic Theory, the Econometric Society in Lausanne, and the German Finance Association in Vienna for useful comments. The usual disclaimers apply.

We analyze optimal compensation schedules for the directors of two plants belonging to the same owner and producing the same good but serving geographically di¤erentiated markets. Since the outcome of each director depends on his own e¤ort and on a random variable representing market conditions, the problem takes the form of a principal multi-agent model. We …rst provide appropriate extensions of the MLR and CDF conditions that ensure the validity of the …rst-order approach in the single agent case. Then, we show that a¢ liation of the random variables is a necessary and su¢ cient condition for the compensation of one director to negatively and monotonically depend on the performance of the other.