Two parties sign a contract but before they fully perform they modify the contract. Should courts enforce the modified … to write a contract that is robust to hold-up or that makes the facts relevant to modification verifiable. But … contract technology, e.g., the use of liquidated damages, to ensure commitment are disfavored by courts and subject to …

-term contracts. We argue that only if the parties to a unitization contract have unit production shares that are the same as their … cost shares will the contract be incentive compatible. Using a data base of sixty unit operating agreements, we measure the … desirable contract rules for avoiding moral hazard. It also shows how the effects of those rules can be replicated in difficult …

We estimate the impact of venture capital (VC) contract terms on startup outcomes and the split of value between the … power to receive more investor-friendly terms compared to the contract that maximizes startup values. Better VCs still … certain contract terms benefits entrepreneurs and enables low-quality entrepreneurs to finance their startups more quickly …

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 …

drift in continuous time. The difficulty in writing an appropriate financial contract in this setting is that the agent can … long-term contract specifies the agent's wage and can force termination of the project. Using techniques from stochastic … calculus similar to Sannikov (2003), we characterize the optimal contract by a differential equation. We show that this …

the optimal contract and analyze how it changes with informativeness. We consider a standard agency model with risk …-neutrality and limited liability, where the optimal contract is a call option. The direct effect of reducing signal volatility is a …