Trust between parties should drive the negotiation and design of contract: if parties did not trust each others …' reaction to unplanned events, they might agree to pay higher costs of negotiation to complete contracts. Using a unique sample … of U.S. principal-agent consulting contracts and a negative shock to trust between parties staggered across space and …

Subjective evaluations are widely used, but call for different contracts from traditional moral-hazard settings …. Previous literature shows that contracts require payments to third parties, which real-world contracts rarely use. I show that … the implicit assumption of deterministic contracts makes payments to third parties necessary. This paper studies …

In many markets supply contracts include a series of small, regular payments made by consumers and a single, large … bonus contracts, which builds on a model of attentional focusing. Our main result identifies market conditions under which … bonus contracts should be observed: while a monopolist pays a bonus to consumers - if at all - only for low-value goods …

make external financing costly, the optimal contract between shareholders and employees involves some degree of risk …

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 …

are on electricity-included property lease contracts causing them to face a marginal electricity price of zero. We use … exogenous variation in weather shocks to show that the largest firms on tenant-paid contracts use up to 14 percent less …

-invest in early construction, seeking a renegotiation thereafter. We show that, in a renegotiation-proof contract, the marginal …

contracts. Theory shows that the possibility of default on a long-term lease generates a risk/lease-length connection. The … higher rent premium for long-term contracts than low-risk tenants. The presence of such tenants thus raises the slope of the …

consumer electronics, and club memberships. We demonstrate that consumption is affected by contract structure (pay-peruse vs …. We also measure subjects' willingness to pay for a contract with free access units, and we find that nearly half of … strategy is therefore to offer a contract that pre-sells access units at a very small discount; this strategy increases revenue …

Microfinance contracts have enormous economic and welfare significance. We study, theoretically and empirically, the … problem of effort choice under individual liability (IL) and joint liability (JL) contracts when loan repayments are made … expectations of partners in a JL contract, and shame from falling short of normatively inadequate effort, under public repayment of …