supplier privileged with private information about supply disruption risk. The supplier's initial reliability, asymmetric to … menu contracts. Under the wholesale price contract, we specify two practical regimes: pull and push. We derive and compare … the initial reliability heterogeneity in both the push and pull regimes. Under the screening menu contract, we also …

optimally offers a contract that makes the agent's utility concave in output. If the agent is risk-neutral and protected by …Consider an agent who can costlessly add mean-preserving noise to his output. To deter such risk-taking, the principal … limited liability, this concavity constraint binds and so linear contracts maximize profit. If the agent is risk averse, the …

possible outcomes, a flexible contract allows for future adaptation but is associated with ex post haggling cost. By specifying … a single outcome, a rigid contract eliminates future disagreement but precludes beneficial adjustments to the occurring … less egalitarian ones. -- foreign direct investment ; cross-country cultural differences ; egalitarianism ; risk …