types, we find that the optimal contract may be very simple, paying the supervisor a flat wage independent of his type and … his evaluation of the agent's effort. Such a contract induces the neutral type of supervisor to report the agent … performance (leniency bias) may be the outcome of an optimal contract under informational asymmetries …

This study adopts behavioral contract theory through a mathematical model and clarifies the situation in which a fixed …–salary contract is preferable to incentives–based one for the principal. Theoretically, the expected utility for the principal is … higher under an incentives–based contract but, in reality, there are companies that employ people via fixed–salary contracts …

Trust between parties should drive contract design: if parties were suspicious about each others' reaction to unplanned … across space and over time, we find that lower trust increases contract completeness. Not only the complexity but also the …-analysis-based measures of contract completeness and do not arise in falsification tests. At the clause level, we find that non …

be implemented even if the supervisor's preferences are unknown. The corresponding optimal contract is similar to what we …

this environment, I study a direct mechanism and characterize an optimal contract. Additionally, I compare the allocation …

employment contract. We show that not imposing such an agreement can be beneficial for the principal as the possibility to leave …

principal is ambiguity averse, and designs a contract which is robust to the worst case effort cost process. Ambiguity divides … the contract into two regions. After sufficiently high performance, the agent reaches the over-compensation region, where … he receives excessive benefits compared to the contract without ambiguity, while after low performance, he enters the …

We relate the design of contract law to the process of development. In this paper, contract law defines which private … levels of effort and trading among agents. The solution to this problem requires a social contract which meets two conditions …: (i) an economywide delegate (judge) responsible for the enforcement of the social contract and (ii) a set of non …

enhance short-term gains; doing so exposes the principal to large, infrequent losses. The optimal contract includes size as an … of re-investment. The optimal contract is implemented using the full array of financial securities plus debt covenants …