simple theory that explains why it may be optimal for the principal to use only an output-based incentive contract, even …

the principal's investment in drafting an explicit contract. The model is well suited for analyzing the relationship …Principal-agent models usually invoke the strong assumption that the parties know for sure ex ante whether a variable … endogenously determined. We analyze a principal-agent relationship where the verifiability of the agent's output is determined by …

Contract theory claims that renegotiation prevents attainment of the efficient solution that could be obtained under … principal-agent model with renegotiation on a set of contracts for urban transport services. The model captures two important … following a cost-plus contract than following a fixed price one. We conclude that the welfare gains from improving commitment …

contract accordingly use heuristics and leave it incomplete. The paper develops a model of limited cognition and examines its …

investment dynamics with partial commitment drastically differ from those with full and no commitment. In particular, investment …

partial effort observation. We argue that the optimal contract based on the non-verifiable observation of the agent's effort …

assumes risk-neutrality and limited liability, and no other functional form assumptions. Very generally, the optimal contract …