We study the design of a sequence of two contests between a pair of identical risk averse employees whose effort choices are private information. It is optimal for the organization to `bias' the second contest in favor of the early winner - the reduction in second-period incentives is outweighed...

We summarize a number of regularities that arise in the empirical literature on contractual relationships between manufacturers and their exclusive resellers. We do this by using studies of traditional and business-format-franchise relationships, as well as studies of sales- force-integration...

I examine whether the choice made by physicians concerning what drug version- trade-name or generic - to prescribe is subject to moral hazard. I use a data set containing information on exactly what drug and what version was prescribed at a particular patient visit to the physician. The results...

The purpose of the paper is to investigate how side track (or collusion) among agents affects the principal's welfare in a hidden action model. We assume that the agent's actions are mutually observable but not contradictable among them and hence direct coordination of actions via side...

A model of employment relation is provided in which agents choose whether to seek self-esteem through work. When they do, they develop an intrinsic motivation to effort. Depending on non-wage characteristics of the job the employer wants to fill, she can encourage this intrinsic motivation by a...

Introducing concerns about land fertility for the landlords in a Principal-Agent model of sharecropping with moral hazard, the authors show that the optimal contract under limited commitment reflects a trade-off between production and land quality maintenance. Using Philippines data, a model...

This paper shows results of comparison of the original theoretical conception of modeling human decisions under risk with two well known models. In the paper the demand function for insurance is constructed for the model of maximization of the probability of agent’s (economical) survival. This...

This paper provides a critical survey of some recent developments in the principal-agent approach to the relationship between lenders and borrowers. The costly state verification model of optimal debt contract is introduced and new results with respect to optimality of standard debt contracts in...