This paper shows how contracts formed by different price-setting institutions--posted-bid and posted-offer--perform significantly differently in a procurement setting facing moral hazard. Compared to a posted-bid institution, higher price and quality are observed in our laboratory experiment when the contract is formed by a posted-offer institution, leading to higher surpluses on both sides of the market. Results are robust in thicker markets. Among possible explanations, the difference is most likely driven by the different reciprocal interaction between buyer and sellers under the two institutions--the posted-offer institution fosters more other-regarding sellers.

This paper develops a model to explain recent trends of work intensification and employee burnout. In an organization a manager assigns tasks to an employee; doing tasks is costly and too many create burnout. In a matrix-style organization, different managers simultaneously assign tasks to an employee, ignoring the `externality' their directives generate on the overall productivity. An over-assignment of tasks also occurs in a vertical hierarchy when task managers at different levels can directly assign tasks. These two frameworks provide a theoretical foundation behind empirical trends and generate testable insights on the organizational causes of burnout.