Scholars have been debating for years the comparative advantage of damages and specific performance. Yet, most work has compared a single remedy contract to another single remedy contract. But contract law provides the non-breaching party with a variety of optional remedies to choose from in...

This article analyzes the optimal design of securities in situations where ex-ante asymmetric information about a firm`s current profit is symmetric and that about future profit is asymmetric. Also a complete contract contingeant on a future profit is impossible to write except establishing...

This paper analyzes a multitask Principal-Agent model in which the performance measures of some tasks are subjective and relational contract is needed for incentive provision. We find that rewarding the Agent based on a subjective measure that aggregates performance on multiple tasks can help...

I study a repeated principal-agent game with long‐term output contracts that can be renegotiated at will. Actions are observable but not contractible, so they can only be incentivized through implicit agreements formed in equilibrium. I show that contract renegotiation is a powerful tool for...

This paper analyzes relational contracts under moral hazard. We first show that if the available information (signal) about effort satisfies a generalized monotone likelihood ratio property, then irrespective of whether the first-order approach (FOA) is valid or not, the optimal bonus scheme...

Two parties sign a contract but before they fully perform they modify the contract. Should courts enforce the modified agreement? The modification may enable efficient trade in response to changed circumstances, or one party may have made an efficient relationship-specific investment and then...