There is a growing consensus among regulators, civil society, and even CEOs that corporations must consider the impact of their activities on a broad range of actors – not just shareholders. The need to do so is apparent from the externalities that corporations routinely impose on...

Current and expected job tenure have fallen significantly over the last two decades. Over the same period, traditional defined benefit pensions, designed to reward long tenure, have become steadily less common. This paper uses a contract-theoretic matching model with moral hazard to explain...

This paper offers a contract-based theory to explain the determination of standard hours, overtime hours and overtime premium pay. We expand on the wage contract literature that emphasises the role of firm-specific human capital and that explores problems of contract efficiency in the face of...

Rather than acting as a safeguard, contracts may actually damage relationships. Using field and lab studies, we assessed the effects of contracts on contract formation, implementation, and ultimate outcomes. Studies 1 and 2 showed that the presence of a contract led people to anticipate more...

We analyze optimal fi nancial contracts when the specifi city of investments is endogenous. Specialization decreases the liquidation value of assets, but it also improves the project's long term productivity. While the first eff ect is known to make financing more diffi cult, we show that the...

The primacy of the principal-agent model of corporate governance is largely undisputed in the existing law and economics literature. Contrary to the prevailing opinion, this Article contends that the bilateral agency paradigm fails to accurately describe the incentive problems arising in the...

This paper examines the power of different contractual mechanisms to influence an originator's choice of costly effort to screen borrowers when the originator plans to securitise its loans. The analysis focuses on three potential mechanisms: the originator holds a “vertical slice,” or share...

This article addresses three observations regarding the board of directors in agricultural cooperatives. First, many scholars and practitioners worry about the competency of the member dominated board of directors in agricultural cooperatives. Second, it is sometimes stated that cooperatives...

This paper characterizes the contractual relationship between an external auditor and a manager of a client firm when the incentives for both agents are implicit as in the career concerns framework. The main result is that the earning management and the audit effort are decreasing over time...