We analyze the contractual relation between workers and their employers when there is nominal risk. The key feature of … 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 …

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 …

enroll in a subsequent commitment contract after the original expires if they receive a nudge for a longer duration initial … contract. Our theoretical analysis of the welfare implications of these effects shows conditions under which nudges can reduce …-inconsistent intertemporal utility maximization model of the demand for exercise. The trial follows more than 4,000 people seeking to make …

also find that contract length and the frequency of rigidity clauses increases in political contestability and closer to … upcoming elections. We maintain that the higher rigidity of public contracts is a political risk adaptation strategy carried …

gains from trade exist in the first period, and may or may not exist in the second period. A long-term contract that … second period. A short-term contract is disadvantageous since a new contract must be negotiated if gains from trade exist in … the second period. A continuing contract can be better. In a continuing contract there is no obligation to trade in the …

Contract law and the economics of contract have, for the most part, developed independently of each other. In this … essay, we briefly review the notion of a contract from the perspective of lawyer, and then use this framework to organize … the economics literature on contract. The review thus provides an overview of the literature for economists who are …

consumed, effectively operates as a two-part pricing contract. This allows monopolists to extract consumer surplus without …

We model imperfect contract enforcement when repudiators and their victims default to spot trading. The interaction … between the contract and spot markets under improved enforcement can exacerbate repudiation and reduce contract execution …, harming all traders. Improved contract execution benefits traders on the excess side of the spot market by attracting …