In many markets supply contracts include a series of small, regular payments made by consumers and a single, large … bonus that consumers receive at some point during the contractual period. But, if for instance its production costs exceed … its value to consumers, such a bonus creates inefficiencies. We offer a novel explanation for the frequent occurrence of …

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 …

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 …

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

We use an experiment to test whether consumers optimally acquire information on energy costs in appliance markets where …, like many contexts, consumers are poorly informed and make mistakes despite freely available information. To test for … willingness to pay for information. We find that consumers acquire information suboptimally. We then compare two behavioral …

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

expectations of partners in a JL contract, and shame from falling short of normatively inadequate effort, under public repayment of … large treatment effects and confirms the central roles of guilt and shame. Under private repayment, a JL contract increases … effort by almost 100% relative to an IL contract. Under public repayment, effort levels are comparable under IL and JL …