current CEO who may have considerable power. Having signed a contract, the agent chooses how much effort to make to acquire … problem; how much information to acquire and what investment decision to make. As a consequence, the equilibrium contracts in … model E involve both bonuses and penalties. We identify lower and upper bounds on these, and study how the bonus and bonus …

seller's valuation and the buyer's valuation, and the buyer evaluates each contract according to its worst-case performance … over a set of probability distributions. This paper demonstrates that the contract that maximizes the minimum payoff over … contract for any given probability distribution is a posted price, which induces bunching. Using the e-contamination model …

effort. Our results confirm that a one-step bonus contract should be used, which means that a bonus contract is most …This study analyzed the principal-agent problem, in which the agent performs risk management tasks, and considered the … cost minimization problem of the principal, the objective of which is to design the cheapest contract inducing a target …

endowment shock is small enough, the optimal contract prevents agents from reaching autarky tomorrow and, thus, from being …

An outside stakeholder’s commitment to bail out a levered investment fund mightencourage the fund manager to take … extreme risks. But what if the bailout were harsh?The loan would have a penalty rate and the manager would have to sacrifice …