338: I examine the standard assumption in the moral hazard agency literature that the principal has all the bargaining power at the contract offer stage. When the agent has limited liability, as is often the case in practice, the contract changes according to the distribution of bargaining...

This paper analyzes the optimal use of short and long-term share prices in management incentive contracts. A key innovation of our model is that the short-term share price is determined even before the manager has made her effort choice and therefore cannot be informative in the standard...