enforcement power of explicit and implicit incentives. This contract preference is associated with the fact that explicit … contracts in a moral hazard context. Explicit incentive contracts that are optimal according to self-interest theory become … actors provide powerful incentives and become superior when there are some fair-minded players. The principals understand …

I show that stochastic contracts generate powerful incentives when agents suffer from probability distortion. When … optimal. A theoretical framework and an experiment demonstrate that stochastic contracts implemented with small probabilities …

We implement a laboratory experiment in which a principal has to decide on monitoring intensity and pay to investigate … be complements. The between-treatment variation in our experiment is qualitatively in line with the normative prediction …

contracts makes payments to third parties necessary. This paper studies incentive contracts with stochastic compensation, like …