This paper investigates contracting situations where giving away some control rights enhances both the donor's and the receiver's incentives to cooperate in the future. We define a partial contracting framework with nonverifiable actions for which either control is contractible (contractible...

This paper shows that introducing agency considerations into a model of innovations and growth can have radical consequences as to the effects of competition policy and industrial policy on the rate of technological change. Whilst competition policy (resp. industrial policy) has a negative...

We base a contracting theory for a startup firm on an agency model with observable but nonverifiable effort, and renegotiable contracts. Two essential restrictions on simple contracts are imposed: the entrepreneur must be given limited liability, and the investor's earnings must not decrease in...