This paper studies an infinite horizon repeated moral hazard problem where a single principal employs several agents. We assume that the principal cannot observe the agents' effort choices; however, agents can observe each other and can be contractually required to make observation reports to...

We re-examine the role of managers in preventing free riding when team inputs are not observable. Holmström (1982) shows that managers are necessary due to the team's lack of static incentives to implement budget-breaking group punishments. We ask whether the team can break its own budget in a...

When procurement contracts are awarded through competitive tendering participating firms commit ex ante to fulfil a set of contractual duties. However, selected contractors may find profitable to renege ex post on their promises by opportunistically delivering lower quality standards. In order...

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...

A decision maker repeatedly asks an adviser for advice. The adviser is either competent or incompetent and his preferences are not perfectly aligned with the decision maker's preferences. Over time the decision maker learns about the adviser's type and fires him if he is likely to be...

The appendices for this paper are available at the following URL: "http://ssrn.com/abstract=2164774" http://ssrn.com/abstract=2164774Many markets without repeated seller-buyer relations feature third-party "monitors" that sell recommendations. We analyze the profit-maximizing recommendation...

A decision maker asks an adviser repeatedly for advice. The adviser is either competent or incompetent and his preferences are not perfectly aligned with the decision maker's preferences. Over time the decision maker learns about the adviser's type and fires him if he is likely to be...

Many water allocation agreements in transboundary river basins are inherently unstable. Due to stochastic river flow, agreements may be broken in case of drought. The objective of this paper is to analyze whether water allocation agreements can be self-enforcing, or sustainable. We do so using...

While there is an extensive literature on the theory of in finitely repeated games, empirical evidence on how “the shadow of the future” affects behavior is scarce and inconclusive. We simulate in finitely repeated prisoner’s dilemma games in the lab by having a random continuation rule....