We study the costs and benefits of additional information in agency contracts, when there is the possibility of renegotiation. The literature to date assumes that contractual simplicity, i.e. the omission of informative contractual contingencies, can only arise in multi-period environments, and...

The purpose of the paper is to investigate contract renegotiation in multi-agent situations where risk averse agents negotiate a contract offer to the principal after they observed a common, unverifiable perfect signal about their actions. Renegotiation gives the agents gains from mutual...

We examine renegotiation in a double moral hazard model with an ex ante budget balancing constraint when both the principal and the agent are allowed to make a renegotiation offer even though the principal proposes an initial contract. Under a belief restriction, any perfect-Bayesian equilibrium...

In the context of (one-sided) delegated bargaining, we analyze how a principal (a seller) should design the delegation contract in order to provide proper incentives for her delegate (an intermediary) and gain strategic advantage against a third party (a buyer). We consider situations in which...

One of the main advantages of delegation is that specific department level information is used. Its main disadvantage is probably that central management looses direct control over certain actions. In this paper we challenge this widely accepted trade-off. We show that delegation might be...

Is the second best outcome of static agency models renegotiation proof? In models with one period of renegotiation, Fudenberg and Tirole (1990) answer no when the principal makes the offer, while Ma (1994) and Matthews (1995) answer yes when the agent makes the offer. This paper analyzes the...

I consider the interaction between an agent and a principal who is unable to commit not to renegotiate. The agent's type only affects the principal's utility. The principal has access to a public signal, correlated with the agent's type, which can be used to (imperfectly) verify the agent's...