talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort … incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete more …, while inequality tends to rise monotonically. Bonus caps and income taxes can help restore balance in agents' incentives and …

During the last two decades economists have made much progress in understanding incentives, contracts and organizations … effects of incentives. Economists may fail to understand the levels and the changes in behaviour if they neglect motives like … the desire to reciprocate or the desire to avoid social disapproval. We show that monetary incentives may backfire and …

This Paper demonstrates that mall store contracts are written to internalize externalities through both an efficient … allocation and pricing of space and an efficient allocation of incentives across stores. Certain stores generate externalities by … attract customers to the mall. Using a unique dataset of mall tenant contracts, we show that rental contracts are written to …

’s productivity in a given firm depends on a worker-firm specific component, unobservable for the firm. Firms offer wage contracts … unemployment. We show that the socially efficient incentive power of the equilibrium wage contract is constrained in the absence of … unemployment benefits. We then apply the model to explain the recent increase in performance-pay contracts. Within our model, this …

The renegotiation of regulatory contracts is known to prevent regulators from achieving the full commitment efficient … service contracts. The model captures two important features of the industry. First, only two types of contracts are used in …

additional equity contracts to intermediate debtors, which is in turn dominated by a simple debt contract, only attractive for … crucial novel feature is the competition between lenders in their choice of contracts offered. The quality of investment … investment is. The paper explains the empirically observed prevalence of debt contracts as an equilibrium phenomenon with …

UK market for fixed-voice telephone service. These contracts included a 12-month Minimum Contract Period (MCP) with …In February 2008, British Telecommunications (BT) introduced automatically renewing, or ‘rollover’, contracts into the … dataset, we measure the impact of rollover contracts on BT customers’ decision to switch to another provider. We find that …