. This paper describes and assesses the various forms of incentive contracts …

Tournaments, reward structures based on rank order, are compared with individual contracts in a model with one risk … absence of a common shock, using optimal independent contracts dominates using the optimal tournament. Conversely, if the … contracts. Finally, it is shown that for a sufficiently large number of agents, a principal who cannot observe the common shock …

efficiency is not attainable. We show that contracts involving mutual control might sometimes be superior to the best contract … likely to be improved by a contractual arrangement that could be agreed upon in advance. In such contracts various aspects of … studies contracts of this nature. We examine the feasibility of implementing various agreements and the nature of optimal …

's effort is not observable, and to induce the agent to work, second-best contracts do not insure the worker fully. They do … eliminate all nominal risk for the parties (by fully indexing the terms of the contracts to the price level) but they would be … re-negotiated. Foreseeing this, the parties to the contract will write one that is renegotiation-proof. Under such a …

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 …

an asset that has greater value if owned by the principal than by the agent. When contracts can be renegotiated, a well … renegotiation. We show that option contracts will achieve the first best whenever this threat-point effect dominates the holdup … procedures. A noisy signal, however, means that the optimal contract will involve terms that courts might view as punitive and so …

Deadlines and penalties are widely used to incentivize effort. We model how these incentive contracts affect the work … rate and time taken in a procurement setting, characterizing the efficient contract design. Using new micro-level data on … Minnesota highway construction contracts that includes day-by-day information on work plans, hours actually worked and delays …

This paper identifies a class of multiperiod agency problems in which the optimal contract is tractable (attainable in … closed form). By modeling the noise before the action in each period, we force the contract to provide sufficient incentives … state-by-state, rather than merely on average. This tightly constrains the set of admissible contracts and allows for a …

-sided asymmetric information on performance that allows for an arbitrary information structure. Two generic contract forms are studied …. An authority contract has the Principal reveal his information before the Agent responds with her information. Under such … a contract, the Agent's compensation varies only with the Principal's information, while her information is used to …