Kalkanci, Basak; Chen, Kay-Yut; Erhun, Feryal - In: Management Science 57 (2011) 4, pp. 689-704
Exploring the tension between theory and practice regarding complexity and performance in contract design is especially relevant. The goal of this paper is to understand why simpler contracts may commonly be preferred in practice despite being theoretically suboptimal. We study a two-tier supply...