In this paper, I study the optimal dynamic contract in a principal-agent model wherein the agent with transparent …-dependent target, where actions are committed based on the agent's report history. I solve the optimal contract in closed-form, which …

This paper examines the optimal provision of incentives for contract designers. A principal hires an agent to draft a … contract that is incomplete because the ex-ante specified design might not be appropriate ex-post. The degree of contract … characterize the optimal incentive scheme for the agent and discuss implications for the degree of contract incompleteness and the …

that hardly explains the many features of an insurance contract. We extend this setup to include the situation that the … costlessly observable, then it should be included in the contract to improve the risk sharing-incentive trade-off under moral … resulting incompleteness of the contract opens the door to controversies and disputes that may lead to judicial procedures. We …

about the asset? How do the disclosure rules of contract law influence the investigation decision? Shavell (1994) showed …-disclosure rule, which requires disclosure of material information, but only after the contract is concluded. We show that this rule … can be more efficient than both voluntary disclosure and mandatory (pre-contract) disclosure …

contract is collateralized when in some state, some portion of the borrower's net worth is forfeited to the lender. We show …

derive the optimal contract for both experimentation and production when the agent has private information about his … asymmetric information is endogenously determined by the length of the experimentation stage. An optimal contract uses the length …

seller's valuation and the buyer's valuation, and the buyer evaluates each contract according to its worst-case performance … over a set of probability distributions. This paper demonstrates that the contract that maximizes the minimum payoff over … contract for any given probability distribution is a posted price, which induces bunching. Using the e-contamination model …

maximizing contracts in dynamic principal-agent models. The FO-approach works when the resulting FO-optimal contract satisfies a …-optimal contract if the frequency of interactions is sufficiently high (or equivalently if the discount factor, time horizon and …

privately held and is unknown to the firm. By explicitly characterizing the optimal multilateral contract, we demonstrate how …