Areas of Expertise

Microeconomics, Industrial Organization, and Game Theory

Academic Degrees

• PhD, Economics, Johns Hopkins University, 1997
• MA, Economics, University of Chicago, 1992
• BS, Business Administration, University of Missouri-Columbia, 1990

Professional Experience

• Associate Professor, Indiana University, 2009-present
• Assistant Professor, Indiana University, 2005-2009
• Assistant Professor, University of North Dakota, 2003-2005
• Lecturer, University of Liverpool, 2001-2003
• Lecturer, Brunel University, 1997-2001

Selected Publications

• Rauh, M. T. (2020). The Neoclassical Firm Under Moral Hazard. Journal of Industrial Economics, 68(2), 191-225.
• Rauh, M. T. (2018). The O‐ring theory of the firm. Journal of Economics and Management Strategy, 27(1), 82-101.
• Rauh, M. T. (2014). Incentives, wages, employment, and the division of labor in teams. The RAND Journal of Economics, 45(3), 533-552.

  Abstract

  Abstract

  We develop a theory of incentives, wages, and employment in the context of team production. A central insight is that specialization and division of labor not only improve productivity but also increase effort and the sensitivity of effort to incentives under moral hazard. We show that employment and incentives are complements for the principal when the positive effects of specialization and division of labor outweigh the increase in risk associated with additional employment and are substitutes otherwise. We provide new characterizations of the partnership, the firm, and the role of the budget-breaker that are quite different from the classical literature.

Edited on April 26, 2019