We implement a laboratory experiment in which a principal has to decide on monitoring intensity and pay to investigate … be complements. The between-treatment variation in our experiment is qualitatively in line with the normative prediction …

experiment, we study behavior in a contract farming game without third-party enforcement but with an external spot market as … outside option. Two players, farmer and company, may conclude a contract but also breach it by side-selling or arbitrary …-order enforcement. Moreover, we investigate whether company players offer price premiums to extend the contract’s self-enforcing range …