We study a two-stage agency model in which the players take the role of the principal in turn. In the first stage, the board of the firm decides payment to the manager to induce him to set up and implement a project. In the second stage, the board evaluates the project to learn its value, and...

We study a principal-agent relationship with auditing in which information from an audit is “soft” – by conducting an audit, the principal observes the agent’s private information, but cannot obtain a verifiable evidence on the information. Moreover, the principal’s auditing effort is...

This paper considers an agency model in which the principal is privately informed of her production technology. In our model, the principal can require the agent to adopt the principal’s technology for production, or alternatively, to adopt a technology in the market. Information about the...

We study a principal-agent model in which the principal has a production technology. The efficiency parameter of the principal's technology is not known to the agent. Alternatively, the principal can make the agent use a technology from a different channel. By gathering information at a cost,...

We compare rigid and flexible organizations when side-contracting among agents is possible. Within a rigid organization, each agent can produce only one component of the final product, whereas within a flexible organization, the agents can reallocate their tasks during the production period. In...

This paper considers an agency contracting with multiple alternative tasks. The agent is privately informed on some tasks, but he must gather information on the other tasks. We show that depending on the cost to gather information, choice of task is employed as an instrument to induce...

We study a monopsonist-supplier model in which each party has its own technology for production. The supplier may use its own or be required to adopt the buyer's technology. Because the efficiency of each technology is unknown to the other party, the choice of technology determines the informed...

This paper considers a principal-agent model with adverse selection, in which collusion among the agents is possible. We compare the optimal outcome in two cases: (i) the principal can perfectly discriminate the transfers to the agents, and (ii) the principal's power to discriminate the...

We consider a principal–agent relationship in which the principal's monitoring can be obstructive to the agent, reducing the agent's productivity. We show that, with obstructive monitoring, the optimal output schedule is distorted in all directions—the high‐cost agent produces less, and...