-seller relationship with renegotiation. Our paper provides causal experimental evidence that an initial contract has a highly significant … threatpoints. We compare situations in which an initial contract is renegotiated to strategically equivalent bargaining situations … in which no ex ante contract was written. The ex ante contract causes sellers to ask for markups that are 45 percent …

optimally offers a contract that makes the agent's utility concave in output. If the agent is risk-neutral and protected by … concavity constraint might bind for some outputs but not others. We characterize the unique profit-maximizing contract and show …

conclude a family of ineffective contracts in the future and a (profitable) new contract in the present or (ii) in future, in … each given state of the world, contracts are broken partially and asymmetrically, after that a new contract is concluded … concluding a new contract in the present. Also, GEI-equilibrium is described as (ii) applied to all states of the world. This …