an implicit contract is the threat of exclusion: the agent fears that he will lose future income if the principal breaks …

We derive the optimal contract between a principal and a liquidity-constrained agent in a stochastically repeated … environment. The contract comprises a court-enforceable explicit bonus rule and an implicit fixed salary promise that must be self … bonus increases while the salary promise and the agent's effort decrease with a higher probability of premature contract …

This paper analyses bargaining over an incentive compatible contract in a moral hazard framework. We introduce the … bargaining power, the contract in the Kalai-Smorodinsky solution yields a more efficient outcome and induces more effort. The …

requires the use of an appropriate incentive contract so as to realign his interests with those of the principal. The parties … of the optimal flexible contract both when the parties have sharp probabilistic beliefs over the possible events in which … risk aversion, the higher the agency costs for delegation and hence the less profitable is a flexible contract versus a …