I study a relational contracting model, in which the agent's discount factor is fixed and known, whereas the discount factor of the principal is her private information. I find that, in the separating contract, information revelation is always immediate, whereas costly signaling continues for an...

We analyze a relational contracting problem, in which the principal has private information about the future value of the relationship. In order to reduce bonus payments, the principal is tempted to claim that the value of the future relationship is lower than it actually is. To induce...

We consider relational contracts for teams in which the agents monitor each other. We demonstrate that providing rents to the agents strengthens peer sanction endowed within the agents' ongoing relationship, which may have a negative effect to induce unproductive collusion as well as a positive...

I study a repeated principal-agent game with long‐term output contracts that can be renegotiated at will. Actions are observable but not contractible, so they can only be incentivized through implicit agreements formed in equilibrium. I show that contract renegotiation is a powerful tool for...

We model how quality concerns affect the relationship between a firm and its supplier. A firm concerned about uncontractible quality for a customizable good has to pay higher prices to sustain a relationship with the supplier. If the customizable good has sufficiently volatile demand, then a...

We study a repeated principal-agent model with transferable utility, where the principal's evaluation of the agent's performance is subjective. Our focus is on equilibria which are robust to the addition of small privately observed shocks to the payoffs. Existing constructions of positive-effort...

Reward systems based on balanced scorecards typically connect pay to an index, i.e. a weighted sum of multiple performance measures. However, there is no formal incentive model that actually describe this kind of index contracts as an optimal solution. In this paper, we show that an index...

We discuss a principal-agent model in which the principal has the opportunity to include a non-compete agreement in the employment contract. We show that not imposing such an agreement can be beneficial for the principal as the possibility to leave the firm generates implicit incentives for the...

"Implicit Contracts, incentive compatibility, and involuntary unemployment" (MacLeod and Malcomson, 1989) remains our most highly cited work. We briefly review the development of this paper and of our subsequent related work, and conclude with reflections on the future of relational contract...

We study relational contracts in a firm-worker relationship with mutual uncertainty about match quality. The worker's actions are publicly observed and generate output, and hence information about the match quality. Despite the absence of private information, uncertainty about match quality...