Taking into account that it is in the nature of the modern corporat ion that risks are distributed over several agents, we discuss in this paper the organisational behaviour as it results from such dispersal of responsibilities for both the principal and the agent. We explore the hypothesis that...

We study relative performance of stochastic and deterministic mechanisms in a principal-agent model with hidden information and no monetary transfers. We present an example in which stochastic mechanisms perform strictly better than deterministic ones and can implement any outcome arbitrarily...

I study the properties of optimal long-term contracts in an environment in which the agent's type evolves stochastically over time. The model stylizes a buyer-seller relationship but the results apply quite naturally to many contractual situations including regulation and optimal...