Trust between parties should drive the negotiation and design of contract: if parties did not trust each others … over time, we find that lower trust increases contract completeness. Not only contract complexity but also the verifiable …

incomplete contract. It is shown that the efficiency of these solutions is very sensitive to the characteristics of the good or …

derive the optimal contract for both experimentation and production when the agent has private information about his … asymmetric information is endogenously determined by the length of the experimentation stage. An optimal contract uses the length …

We model non-binding retail-price recommendations (RPRs) as a communication device facilitating coordination in … that RPRs may be part of a relational contract, communicating private information from manufacturer to retailer that is … indispensable for maximizing joint surplus. We show that this contract is self-enforcing if the retailer's profit is independent of …

each other. The contract may contain two types of incentives for the agent to work hard: a bonus and a threat of dismissal …

performance measures. We show that such an index contract may indeed be optimal if performance measures are non-verifiable so that … measurements), the optimal self-enforcing (relational) contract between a principal and a multitasking agent is an index contract …. The weights reflect a trade-off between distortion and precision for the measures. The efficiency of the contract improves …

each period. In contrast to previous findings, we demonstrate that writing a simple fixed-price contract based on product … values in which a higher investment can be implemented only if a formal fixed-price contract is written and combined with an …

expectations of partners in a JL contract, and shame from falling short of normatively inadequate effort, under public repayment of … loans, as the main psychological drivers of effort choice. Evidence from our lab-in-the-field experiment in Pakistan reveals … large treatment effects and confirms the central roles of guilt and shame. Under private repayment, a JL contract increases …