Cost-plus procurement contracts are widely used by the government. Although prior studies have recognized that payment ceilings are a common element in cost-plus procurement contracts, these studies have not examined the endogenous determination or the welfare effects of such ceilings. In this...

Multiple measures of managerial performance, including the increased use of non-financial measures exist widely in the business world. Using a principal-agent model with moral hazard, we study a special case of two performance measures - production and internal quality. We derive a condition...