We develop a new theory of the firm where asset owners sometimes want to change partners ex-post. The model identifies … incentives for specific investments, and that wealthy owners actually want to commit to ex-post wealth constraints. Our analysis …

responsive. We show that even if hard evidence is unavailable and monitors have heterogeneous incentives to (mis)report, it is …

quality also tends to be lower for new securities. Finally, we find that optimal contracts that provide incentives for both …

indirectly inferrable through the success or failure of projects that the leader undertakes, then the incentives of the leader … there are poor incentives and inefficiently low payoffs, even below that of simply replacing the leader in every period …. Incentives can be improved via term limits. …

talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort … away from less easily contractible tasks such as long-term investments, risk management and within-firm cooperation. Under … incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete more …