the world influences the costs of the suppliers. Complete contracts conditioning on all future realizations of the state … complete and incomplete contracts. The key insight is that the allocation prescribed by optimal complete contracts is … sequentially optimal with incomplete contracts if the buyer does not receive too much information ex-interim. We show that the …

Subjective evaluations are widely used, but call for different contracts from classical moral-hazard settings. Previous … literature shows that contracts require payments to third parties. I show that the (implicit) assumption of deterministic … contracts makes payments to third parties necessary. This paper studies incentive contracts with stochastic compensation, like …