The marginal cost of effort often increases as effort is exerted. In a dynamic moral hazard setting, dynamically increasing costs create information asymmetry. This paper characterizes the optimal contract and helps explain the popular yet thus far puzzling use of non-linear incentives, for...

I present a model in which a principal selects one among many agents to develop a project and influences the agent's ex post level of effort not by outcome-contingent rewards, but by the choice of the project's mission. The closer the project's mission to the agent's preferred mission, the...

The dissertation consists of three chapters. The fist two chapters use principal-agent models to analyze optimal contract design under the assumption that the contract can induce the agent to acquire relevant private information. Specifically, Chapter 1 demonstrates the use of stochastic...