efficiency is not attainable. We show that contracts involving mutual control might sometimes be superior to the best contract …

re-negotiated. Foreseeing this, the parties to the contract will write one that is renegotiation-proof. Under such a … contract, nominal shocks affect real consumption. Since the argument should apply in many situations, it will have …

We estimate the impact of venture capital (VC) contract terms on startup outcomes and the split of value between the … power to receive more investor-friendly terms compared to the contract that maximizes startup values. Better VCs still …

drift in continuous time. The difficulty in writing an appropriate financial contract in this setting is that the agent can … long-term contract specifies the agent's wage and can force termination of the project. Using techniques from stochastic … calculus similar to Sannikov (2003), we characterize the optimal contract by a differential equation. We show that this …

procedures. A noisy signal, however, means that the optimal contract will involve terms that courts might view as punitive and so …

The paper reviews empirical findings on executive compensation in light of marginal productivity and contract theories … estimated. Second, executive contracts must provide incentives for managers to act in the interests of shareholders. Potential …

Managers' incentives may conflict with those of shareholders or creditors, particularly at leveraged, opaque banks …