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Contractual Incompleteness and the Nature of Market Interactions

Brown, Martin; Falk, Armin; Fehr, Ernst - C.E.P.R. Discussion Papers - 2002

attempts to appropriate the whole gains from trade, which causes much disagreement about contract terms. If contracts are … long side of the market so that there is little disagreement about contract terms. Our results support theories of the …

Persistent link: https://www.econbiz.de/10005661770

Executive Compensation: A Modern Primer

Edmans, Alex; Gabaix, Xavier - C.E.P.R. Discussion Papers - 2015

This article studies traditional and modern theories of executive compensation, bringing them together under a unifying framework. We analyze assignment models of the level of pay, and static and dynamic moral hazard models of incentives, and compare their predictions to empirical findings. We...

Persistent link: https://www.econbiz.de/10011272716

Tractability in Incentive Contracting

Edmans, Alex; Gabaix, Xavier - C.E.P.R. Discussion Papers - 2009

This paper identifies a class of multiperiod agency problems in which the optimal contract is tractable (attainable in … closed form). By modeling the noise before the action in each period, we force the contract to provide sufficient incentives … utility, a pecuniary cost of effort, Gaussian noise or continuous time. The contract's functional form is independent of the …

Persistent link: https://www.econbiz.de/10008509464

Dynamic Incentive Accounts

Edmans, Alex; Gabaix, Xavier; Sadzik, Tomasz; Sannikov, … - C.E.P.R. Discussion Papers - 2009

may not be felt until far in the future. We derive the optimal contract in a setting where the CEO can affect firm value … through both productive effort and costly manipulation, and may undo the contract by privately saving. The optimal contract …

Persistent link: https://www.econbiz.de/10008477185

Tying, Risk-Sharing, and `Lock-In': An Investigation of Countertrade Contracts

Marin, Dalia - C.E.P.R. Discussion Papers - 1992

The paper sees countertrade - the tying of trade flows - as an insurance contract that mitigates contractual hazards … investment. This way tying is seen as a commitment device against renegotiation during contract execution when investments are …

Persistent link: https://www.econbiz.de/10005123662

Financial Contracting Theory Meets The Real World: An Empirical Analysis Of Venture Capital Contracts

Kaplan, Steven; Strömberg, Per Johan - C.E.P.R. Discussion Papers - 2000

We compare the characteristics of real world financial contracts to their counterparts in financial contracting theory, by studying actual contracts between venture capitalists (VCs) and entrepreneurs. (1) The distinguishing characteristic of VC financing is that they allow VCs to separately...

Persistent link: https://www.econbiz.de/10005123862

Tax Contracts and Government Formation

Gersbach, Hans; Schneider, Maik - C.E.P.R. Discussion Papers - 2008

proportional elections. A tax contract specifies a range of tax rates a party is committed to if in government. We develop a new …

Persistent link: https://www.econbiz.de/10005504289

Assortative Matching in a Non-transferable World

Legros, Patrick; Newman, Andrew - C.E.P.R. Discussion Papers - 2002

Progress in the application of matching models to environments in which the utility between matching partners is not fully transferable has been hindered by a lack of characterization results analogous to those that are known for transferable utility. We present sufficient conditions for...

Persistent link: https://www.econbiz.de/10005504313

The Generalized Informativeness Principle

Chaigneau, Pierre; Edmans, Alex; Gottlieb, Daniel - C.E.P.R. Discussion Papers - 2014

This paper shows that the informativeness principle, as originally formulated by Holmstrom (1979), does not hold if the first-order approach is invalid. We introduce a "generalized informativeness principle" that takes into account non-local incentive constraints and holds generically, even...

Persistent link: https://www.econbiz.de/10011096100

Contracting With Synergies

Edmans, Alex; Goldstein, Itay; Zhu, John - C.E.P.R. Discussion Papers - 2013

This paper studies multi-agent optimal contracting with cost synergies. We model synergies as the extent to which effort by one agent reduces his colleague's marginal cost of effort. An agent's pay and effort depend on the synergies he exerts, the synergies his colleagues exert on him and,...

Persistent link: https://www.econbiz.de/10011083428